Freddie, Clearwater production estimatesGood evening Freddie, first I apologize for such a lengthy answer to what seems like an easy question. However this is a complex question which can be interpreted and answered in many ways. I appreciate you asking the question and agree this may not be straight forward due diligence for the average investor as there are MANY moving parts. I will be the first to admit I don't have all the puzzle pieces.
There are many complications and this is difficult to answer with certainty of course..
I will try to break some of these complications as I appreciate you have asked the question and will at least try my best to respnod
I appreciate your line "BSW is a chart and graph guy ... he takes the time to do these types of things and I for one find some value in what he does but I don't hold him to anything and I certainly don't make investment decision based solely on his inputs."
I agree 100% NO one really can give you a definitive answer. I am just estimating based on trying to tie information together but at the end of the day this is just my thoughts and opinions (Company data is the only thing that matters)
Ok so some of the difficulties
1. The first question of course is are you looking at point in time versus cummalative. To explain further you could approach this from multiple angles. Take for instance Q1 you could say what is the BOE/D average or point in time on Mar 31 leaving the Quarter into Q2. The production rate you exit in Q1 into Q2 is obviously different than the "average" Q1 rate
2. On average from what I have seen you have two weeks to drill a well and lets give another week etc to get into production etc. So for instance the 3 wells I mentioned started drilling March 15th would not be on production until April so say Q2.
3. I would estimate the last well to be brought on line from the 17 wells I tracked would be the 100/01-14-082-18W5 Well. With a spud date of March 3rd two week to drill and a week to complete etc. maybe that has 3 days before March 31st. The first well on the chart which started drilling on Jan 6th by the time you drill complete etc. maybe that has 63 days on production.
4. So now you say for the first well using the IP30/IP365 with straight line decline for 63 days conservative values (335/180) you are now looking to calc volume and convert back to a quarterly BOE/D for the 90 days...or do you look to say at March 31 what is the BOE/d at that point in time both different
5. Say well 100/08-30-078--15W5 which started drilling Feb 5th...if all goes well producing in Q1 for 30 days. Say you estimate an IP30 of 335...but again only 30 days not the full 90 for the quarter
6. Another complication which we can't quatify is the pad reduction. In some instances you limit wells when drilling off the same pad. So while you have completed a great well on a pad as you drill off the same pad to be cautious I beleieve you reduce the flow on the other well. So this would have an impact. Of course you can ramp back up on the pad after this is done but this will impact the flow totals.
So with all these complications I come back to a prorated volume based on "days" in production using company gidance IP30/IP365 rates and decline rates HOWEVER with NO known assumption on pad reductions.
So say 11 wells using the conservative IP rates and drill times I come up with 410 total production days. So say average 37 days over the entire 11 wells (yes some will be on for 63 and some less than 20.
So with 410 production days with the conservative IP (again some wells have been bigger than the IP30 335.) I come to 130K barrels of oil. Now I will assume $40 net in Q1 that gives me about $5M or 1444 boe/d (again I don't know just rough not knowing true production rates or pad impact
The key is you could say if you get into Q2 now with 17 wells averaging an IP30 of 335 with declines this gets you 5-6K boe/d or so I estimate which jumps value @ $100 Q2 oil to $30m give or take per quarter unhedged or say $120m/year.
As a sanity test I look at the first 9 wells hitting in Jan 2022 3K boe/d and my logic gets me 17 more wells 6K boe/d....so I seem to be in the ballback on volume....Q2 with $100+ average oil will be spectacular unhedged
I'm sure Red can jump in on this too..and I admit I was just using rough numbers and my thoughts so of course take all this with a grain of salt. i would be very excited to have an additional 5K boe/d walking into Q2.
Hope this helps and again i look to Red et al to review for gaps
Last we really need to wait for the company info as these are only guesses and without knowing the pad impact or real rates they could vary quite a bit. Said another way I just don't know these are my hopes/guesses.
Sorry for not providing a simple answer LOL