100 BCF Gas wells - GermanyIn Germany Vermillion is drilling gas wells with success, deep, high pressure gas wells with reserves that are estimated to be 100 BCF of gas.
Well these are not shale wells, but their are extension of target that they have been looking at in other countries already with success. (70% confidence in each drill)
If you look at the hedges in VET hedging porfolio, they can hedge gas into 2027 at collars in the $10 range. Hedging in Europe fetches prices at the receiving end of LNG.
If wells have a 100 BCF and you can get around $10 mcf that is a 1 billion dollar well value. If you can get $20 dollars a mcf, that is a 2 billion dollar well.
So the wells in Germany it is early days, but the first two have hit gas and we should get results from the second one in the beginning of 2025. These wells are not cheap to drill but the value is amazing. The estimate the reserves in the first well at 100 BCF.
VET has the technical team, the land, and has a long list of targets that could be drilled, this is early days, these wells are highly value resouce at the right end of LNG.
Selling a few of them right now might not be a totally bad idea given gas is $21 mcf and you can bring that cash forward in the cycle.
I think the European opportunity is understated here, and today with oil trading below 70, these gas boe's in Europe are getting significantly more than Brent Oil and my guess VET is going to have another solid quarter.
European Gas, is a gold mine for VET and they are well down that road.
IMHO
MHP