While everyone has their eyes fixed on RAX's cursed reserved writedown, there was quite a surprise piece of news within their 2001 guidance and 2002 outlook CC.
Ecuador 5000 b/d from 2 wells.
3 more wells to drill or drilling!
Their website has an updated presentation that lists current net production at 5,500 b/d from these lands. From squinting at their published reports, I think only 1000 b/d is included. Their YE/4Q may reflect another 4500(?) b/d to their net production on the oil side. Anyone else with opinions/guesses/confirmation?
At current prices, that's about 5 months payback on the new Ecuador properties not couting any more successes with the 3 remaining wells, of course beware, I'm using my simple math. Not bad for about (3%) of their capital invested last year?
Here's some clippings from two of their recent quarterlies that talk about Ecuador. It can speak for themselves:
Q3 20011108 NR:
"Following the company's largest ever winter drilling
season, Rio Alto conducted normal, seasonally reduced
operations during the second and third quarters. Third
quarter operations focused on northwest Alberta and
Ecuador drilling projects and optimization of newly drilled wells."
"At the company's Tiguino play in Ecuador's Oriente basin, acquired late in the first half of 2001, Rio Alto
is conducting a two-well, horizontal drilling program and a concurrent seismic effort scheduled for completion by year-end. "
Q2 200108
"Late in the second quarter Rio Alto purchased a 70-per-
cent interest in the Tiguino block and a 90-per-cent
interest in the Charapa block in the Oriente basin of
eastern Ecuador, an underexplored region of increasing
industry interest. For the purchase price of approximately $13-million, financed through working
capital, Rio Alto acquired net production of 1,000 barrels
per day of medium-gravity crude oil and 90,000 acres
of undeveloped land. The company plans to conduct a
seismic program in the coming months and drill and
complete two exploratory wells before year-end. "
"The acquisition of properties in Ecuador late in the
second quarter, together with development commitments
on the properties through year-end 2001, prompted an upward adjustment of $25-million to Rio Alto's
capital expenditure plan. "
For the technically inclined, the gap between 17 and $18
look like a tempting short term target.
Given bleak picture being painted, I'm hoping to see RAX in the $15 level soon. At least before the gap is filled. |
