RE:Not a Fan of the update It acrtually makes the most logical sense if you are in OBE for the long term like OBE's management team is with amount of shares they own. I have expected big capex for months was coming.
The trick is companies should scale back drilling to basically zero if oil falls under 75 bucks.
The paybacks per well get really sh*tty when oil is under 75 bucks.
Get as many wells as you can get online while the economics make the paybacks worth it.
The dividend model doesnt work well for medium size oil and gas companies...benn proven over and over again.
The future outlook for oil prices is too uncertain to be saving drilling locations for the future.
Key thing is so much of a cardium well's production is in the first 8 months of production.....critical to get high pricing in these first 8 months. In 2024 oil may be 70 and then what? End up drilling wells with 1.5 year paybacks...and...lol
Flush11 wrote:
Thanks for the update John. nice work.
To me it is back to the future with oil companies that announce a budget, run into some higher prices, accelerate first half spending and then announce a big increase for the second half.
It is basically verbatim on the management style that Nuttall always throws under the bus.
I would have liked stay flat production spending in the Cardium/Pembina with spending to fill out facilities in the Prop area - and a bit of exploration money spent in Clearwater. Instead we have money thrown at everything, including Viking wells which apprear to be more expensive and slower than all of their competitors.
unless they are raising production on the viking assets so they can monetize it from a sale to Saturn or someone similar this is really disappointing.
this management team is not making choices. They are throwing money around like it wont end.
Decline rates will be increasing dramatically, we will need to spend more to maintain production and who wins? Did someone get a nice big options bonus for hitting growing production targets?
not a fan.