Post by
Flush11 on Mar 06, 2024 3:46pm
Awesome deal, great news
Kav they can certainly do it within the existing budget. It is just 3.6 wells this year. Probably a standard well or two to extend the resource and an ERH or two to test the economics at Bonanza. So 10-20 million. Like you say, slow down the Cardium program a little more. It was already supposed to drop from about 40 wells to about 30 to maintain the current production rate.
The capex budget was at 90-100 million. I am assuming the 10MM variance was based on whether they decide to drill a second Montney well this year or not. They don't have any more Montney land expiring so there is also flexibility on drilling the next Montney well too. If the Montney well is tied in right away there is going to be a bunch of cash flow spun out of that. I don't think those numbers are in the forecasts yet.
With current gas prices I doubt anyone is in a hurry to launch a significant dividend in the first two quarters, but they can initiate a small one any time now. There is so little stock out though, a 10 cent divvy would be cheap.
forecasting 6,000 boe of CL production by 2026 indicates to me that they already have some kind of a plan here. Need to know what the type curves/decline rates are to come up with a drilling estimate now. Guess we will hear tomorrow or see in the corporate dec in a couple of days.
I also wonder what the budget looks like for the last couple of months. Did they complete and tie in everything they drilled in the cardium or is the duc inventory growing? or did they drill a bunch of WG wells with Entrada that are so oily it doesnt matter?