Do Kelt Oak new well #s make senseKelt is saying 100-150 bpd per 1000 Mcf. I believe that equates to ~40% oil/condensate. That the wells pay off in 18 months. At the time this was stated, station 2 was like 20 cents. The NG netback in 2023 was $8 when Kelt realized $3 on the gas.
Well costs are $8MM (2023 reserves report). IP365 was 650 boepd in earlier presentations. EUR hasn't changed YoY. So a wild guess IP540 might be 475 at best?
So Kelt would need $31 netback during those 18 months to pay for the wells. (They generated $19 netback in 2023.
40% oil x $95 = $38
3% NGL x $25 = $0.75
57% NG x $10 ($1.66x6) = $5.70
Realized = $44.50
royalties (accrued not cash) = $4.50
operating and transport $11
= $29.
So possible but highly optimistic on the oil % and the NG realization.
If the well costs are lower (say $7M), then you need grosso modo 7/8 of the oil % or 35%. if $6M, 30%.
(One thing is, Kelt has very high infrastructure costs. Where those are - Wembley, Oak, ?? - we don't know.)
Conclusion: they should back up their #s. So should myhoney.