RE:Reserve Report OutNot nearly as interesting as the operations update released after market close:
GLJ recently reviewed all of Leucrotta's Lower Montney Turbidite wells in conjunction with assigning reserves for the 2016 year-end Reserve Report previously released. While there is variation of reserves assigned across the pool, given different well test rates and gas oil ratios, the average economics are compelling.
For Lower Montney light oil wells, GLJ assigned, on average, 669 mboes (32% oil and ngls) of ultimate recovery per well. Using Leucrotta's current estimated drill and complete costs (before pad development) of $3.8 million, GLJ's average production curve, and GLJ's January 2017 Price Forecast, the average Lower Montney Turbidite light oil well will generate a rate of return of 91% and a net present value (NPV10) of $7.1 million.(5)
For Lower Montney liquids-rich gas wells, GLJ assigned, on average, 1055 mboes (21% oil and ngls) of ultimate recovery per well. Using Leucrotta's current estimated drill and complete costs (before pad development) of $3.8 million, GLJ's average production curve, and GLJ's January 2017 Price Forecast, the average Lower Montney Turbidite liquids-rich gas well will generate a rate of return of 223% and a net present value (NPV10) of $8.7 million.(5)
Leucrotta currently owns approximately 105 net sections of land within its mapped boundaries of the Lower Montney Turbidite play. Current data suggests there are approximately 80 net sections in the oil window and 25 net sections in the liquids-rich gas window. Based on up to 8 wells per section in the oil window and 4 wells per section in the liquids-rich window, Leucrotta has a potential drilling inventory of 640 Lower Montney Turbidite oil wells and 100 Lower Montney Turbidite liquids-rich gas wells.(6)