Raymond James Jeremy McCrea says Their Oil Wells Fantastic Economics
.Surge (Frobisher and Sparky) Frobisher: We think the market is missing the updated results from SGY’s Frobisher play with the recent wells that came on in late January/February. With ~55 days on production now, these wells have produced at an average rate of 250 bbls/d (approximately 2.5x our type curve assumption at 110 bbls/d that we assume for most Frobisher wells in SE Saskatchewan). With the wells costing ~$900,000, well payouts are occurring within 4-5 weeks at current prices.
Overall, we wouldn’t be surprised to hear SGY discuss these wells when it reports its Q1 results (and possibly an expanded capex program to take advantage of these economics).
Sparky: Elsewhere, in the Sparky, in early January, we commented on the success Surge was having by bringing drilling designs used in the Clearwater to its Sparky (i.e., waterbased mud vs. oil based-mud). With another month of production data, its 15-5 well continues to perform exceptionally well. With 191 days on production now, the well has produced 31 mbbls and at current prices, likely has almost reached 2x payout. We’ll note first month rates were 142 bbls/d with the latest month at 105 bbls/d (showing much shallower decline than traditional Sparky wells