Post by
stockfy on Nov 08, 2017 6:23am
Infrastructure Expansion Cost, Cost/Montney well, Condensate
RMP's cost per Montney well is $5.7 million. RMP has to lower it because it's high for a junior Montney producer with limited liquidity:
" Drill, complete and tie-in costs for these two wells is estimated to be approximately $5.7 million per well. "
For reference it's lower than Delphi's (DEE) whose cost per Montney well is about $8 million.
But Chinook's Energy (CKE) cost per Montney well is just $4.2 million and CKE's IP rates are very high being between 1,500 boepd to 2,200 boepd with about 19% Condensate that sells at a Premium to WTI.
Based also on the press releases, RMP's Montney wells don't seem to have Condensate (Pentane) that sells at higher prices than WTI. They contain only oil and low-priced NGLs.
Additionally RMP has to let us know about the infrastructure costs it will incur in Q1 2018 to accomodate the new production coming from the new wells. No guidance to date. RMP's existing infrastructure is not enough and RMP will have to borrow money to expand its existing facilities in early 2018. Based on similar projects from other companies, RMP will have to borrow about $15 million or $20 million to complete the expansion because it will spend all the existing cash for the 5 new wells by April 2018:
" The Company’s 2-23 Facility now has capacity to handle 1,500 bbls/d of crude oil, approximately 16 MMcf/d of natural gas and 7,500 bbls/d of emulsion The Company’s current production at Elmworth is approximately 2,200 boe/d, weighted 35% light crude oil and NGLs (based on field estimates)."