46 dollar condensate, 6.5 million dollars wellsKarr economics have historically be based on DCET cost of 12.5 million dollars, that is roughly 6 million dollars more then they are today.
That means new production has 4-5 dollars a better return then the old wells.
Previously based on $55 dollars wti, Karr would generate 25 dollars a boe return. Now that same production can be maintained for a lot less and the netbacks would be close to 30 dollars a boe.
40,000 boe Karr example
40,000 boe/d *365 *30 = 438 million dollars operating netback.
Number of wells that need to be drilled to maintain production = (12 * 6.5 million) = 78 million
438 million - 78 million = 360 million dollars.
So if oil gets back to 55 wti and Karr alone could spin off 360 million dollars, that is actually $2.70 a share just from Karr producing 40,000 boe a day.
At 46 wti netbacks are likely in the 23 dollars range.
40,000 * 365 * 23 = 336 million - 78 million = 258 million.
So even at 46 wti Karr alone can spin of 2 dollar a share.
So it is pretty clear, POU will produce 28,000 boe a day at Karr in Q4, but expect karr to go to 40,000 boe a day. Then from Karr alone POU will be spinning of Cash like Crazy.
55 WTI
Karr is spewing off 438 million dollars with maintenance capex of 78 million dollars.
46 WTI
Karris is spewing off 336 million dollars with maintenance capex of 78 million dollars.
46 dollars is the current price of condensate.