Coles Notes for Today’s newsShould see more green tomorrow as market continues to digest this news!! Results out Monday!
Great new hires!! VP of Engineering and Exploration was formerly at Husky. Care to guess who one of the biggest players in the Viking are. Yup. Husky. He has some miles on those plains.
Also the disclosure of which wells are to be drilled is key. Plato and Milton are leases on the edge of existing production. Kerrobert and Prairiedale are not contiguous to existing production. This to me means they have a chance to reach untapped pools and therefore are leases with gusher results potential.
This field may seem boring to many. With most results expected to be modest. However new tech is being applied to drilling and I am hopeful that this tech will change average Viking production by 100%-250% (this has been disclosed in the investor presentation). This tech was tested in the 5 well program that results are due on next week.
If we take the average 45bpoe well in the Viking and increase it by 175% you get 78.5. If Saturn is able to drill 20 wells with this tech/debt. There is reason to believe that the 1250bpoe estimate created from the first five wells (no new tech). Is incredibly conservative and until you disclose that you cannot change your calculations estimate.
But I can!!
25 wells producing at an average of 78.75 bpoe and 5 at 45 = 1968.75 + 220 = 2188.75
Zero hedges. Solid net backs. Do the math on that cash flow if these numbers are achieved!!
175-250 million market cap easy. If oil is being squeezed and prices rise. So too would this estimate.