Second Wave Petroleum Inc SCSZF

I hate to be the bearer of bad news

[binzer55]

But SCS's BHL land may not be economic.
Yes, that first joint venture well had spectacular initial flush production, but what is it doing now? And how quickly will it decline to a marginal rate?
They are drilling into a relatively thin formation and using huge fracs in their completions. It doesn't take a rocket scientist to figure out that they may be sucking the soda can dry in a very short period of time.
They need recovery rates of 25% just to break even. How many think that is realistic?
Run the numbers, check the porosity and other formation data, figure it out for yourselves.

I once owned a similar story years ago in the beginning of the Bakken boom. A small company was drilling some great wells that would have paid out in 6 months. Trouble is, they were drilling a thin formation and the wells stopped producing after 3 months on line. They eventually sold out for pennies on the dollar.

For me, ARN is the much better story, as the formation they are drilling is twice as thick, and much of their BHL is floodable, which will boost their recovery rates substantially and make their wells very economic indeed.

ARN is pretty much a sure thing, and is a definite takeout target. SCS is still very much a huge gamble.

[kooteni]

You claim the BHL may not be economic needs facts which your post lacks.From news releases and their June presentation I get the following;- Ultimate reserves - 250k Boe which does not include waterflood which could increase recovery by min. 30%- Cost/well - $5million- 15-36 has produced 32,000 boe, was pumping at 350 boepd with fluid level at surface.Payout of well at $60 netback is 83,000

[binzer55]

You make a heck of a lot of assumptions.You assume that SCS's reserve projections are a guarantee. There are no guarantees.You assume that they can waterflood this formation. According to information I have seen, that is doubtful.You assume that the first JV well will not drop much in production. What basis do you make that assumption on? You say you don't know what the porosity and

[kooteni]

It's obvious you know little or nothing about reservoirs or production whereas I have 30 years experience in the oil patch.First off the well is being restricted, The pump equipment currently installed can not pump all the oil out of the wellbore.ie; the fluid level is at surface in the annulus. When a well is producing at maximum rate with a pump, the fluid levelis at the pump (and the pump

[binzer55]

Well, koot, if you have "30 years experience in the oil patch", I pity the companies you worked for.Your "explanation" of the reason for the well only producing 350 boed is hilarious;" the fluid level is at surface in the annulus. When a well is producing at maximum rate with a pump, the fluid levelis at the pump (and the pump is at the kick-off point  approx

[kooteni]

Your comment:but if the fluid level is 9000 feet underground, just how is the oil getting out of the well?You see, Mr. Expert, that backpressure will always be there as that 9000-ft column of oil above the pump will always be there, exerting a backpressure on the pump. So much for your "explanation".Your comment on pumps shows your total ignorance of oil well pumping systems. I suggest

[binzer55]

Your quote;"You mention formation porosity on 3-4. I believe we were discussing 15-36 which is 6 miles away from 3-4. You cannotlogically claim that porosity's are the same."The porosities are very similar throughout the unconventional plays in Swan Hills, let alone over the 6 mile distance you think is so important. But you should know that, since you have worked in "the patch