RE:RE:Back of envelope SWAG - 3 wells get you how many more?JDavis17 wrote: MilitaryMan wrote:
Just trying to figure out if 1 well drilled can finance a new one ( can BBI organically sustain itself with all these new 2017 wells without additional financing
Blackbird results of the three wells just announced equal 1,064 bbl/d of condensate x 365 dys 388,360 bbls x $53 netback = $20,583,080
$$ available for drilling 3 x wells $6.85M on the $20.58M. BBI avg is actually running well below that.. so allowances built in ( for lower netback revenue amounts and lower drilling costs
Those wells won't produce at the IP30 rate for the whole year. BBI doesn't provide a type curve for their wells, as they haven't been able to run them consistently enough to know what they will do, but you should assume they will decline as much as 50% by the end of the first year. So the average production for the first year may come in at 700 to 800 bbls of condensate, which is still very good. The only caveat to the above assumption is the fact that we don't know how restricted these wells were while trying to get IP30s, as the peak condensate production from the three wells was over 1500 bbls of condensate per day. If that is an indication of the deliverability of these wells, the first year average could hit your number, which would be outstanding. Bottom line, the numbers are very good, and with the time to establish long term production history, the value of these wells could surprise a lot of people. But as with everything else with BBI, investors need the patience to let it develop. BBI was always a 2019 story, and I still think those with the fortitude to hold until them will be well rewarded. The pumping aholes of a year ago are mostly gone, so now the company and its share price will depend on results, not hype and bs. That is a good thing.
I agree with you regarding that we don´t know how much these wells were restricted for more accurate IP 30`s. Plus the percentage of recovered load water was very low. Plus when you compare IP numbers from BBI`s neighbours with no takeaway limitations you see often stronger IP 60`s and IP 90`s compared to IP 30`s. That`s a strange thing but shows the potential of this resource play.