RE:RE:RE:Good, the bad, the ugly from Q1OBE has been very clear about their drilling program, and have followed it.
If view that as adjustment, it may be becuase you didn't listen to what they said.
OBE stated its capex for 2022 was 150 million, and would be revisited in mid 2022.
They said they would spend about $105 million in H1. Since Q2 is the breakup quarter in which very little capex can be spent, that meant about $105 million in Q1.
They spend $103 million in Q1. That is what they said they would do.
They said they would use 4 rigs. That is what they said they would do.
They spent about $15 million on land in Q1 - it seems they budgeted for that.
At the end of Q2 we assume they will increase their cap ex for H2 from $45 million to something more. We assume this becuase oil prices have remained high, and look to remain high for at least the rest of this year.
Markets don't get spooked by this sort of honest, accurate and authentic planing. They applaud it.
The market may be disappointed if OBE does not to increase its Capex in H2 from $45 million. It would imply their access to money is being reduced, or alternatively, they are unable to get the drilling equipment needed to do more.
OBE has a lot of value to harvest in its heavy oil land. Its unclear to me what sort of access they have up there. It may be winter drilling only. August up there can still be pretty muddy in a wet year. If it is winter only, then Q3 may not be that active (Viking and maybe not that much more). With Q4 then being as active as they can make it.
Much of their heavy oil development may be determined based on prior development.
I'm hopeful their Dawson permits are accessable in Q3, and they intend to redrill these as multihorizonals
Heavy oil wells are a different animal. They have a higher breakeven requirement - but once that break even number is exceeded they have a much higher rate of return. We are well past that threshold presently. OBE's heavy oil is now the most attractive asset in their portfolio