C&C Energia has 222 mmbo of contingent resources with a 27% chance of success (COS).
222 mmbo x 27% = 60 mmbo.
The full field value of a barrel of oil in Colombia with a $62 / bbl OpEx netback is $35 / bbl 2P NPV
60 mmbo x $35 / bbl 2P NPV = $2.1 billion
60 mmbo x $62 / share is $3.7 billion in funds flow from operations.
using a 10% chance of success on 222 mmbo = 22.5 mmbo
22.5 mmbo x $35 / bbl 2P NPV = $787 MM in 2P NPV
CZE Enterprise value is $380 MM
Even a 5% COS yields 11 mmbo and $380 MM 2P NPV
C&C Energia notes a 70% drilling success rate. I assume the 70% success rate is a conmbination of exploration and development wells. CZE has 9 oil fields in production, in a fairly short period of time. Those 9 discoveries that are now producing indicate a very high chance of success drilling similar oil sructures in close proximity to those existing fields. IMO 27% COS is reasonable in the Llanos basin blocks located near existing oil production.
As C&C Energia begins exploration drilling on the high impact Putumayo blocks, I'd risk those wildcats at a 18% chance of success. 1 in 6 wildcats become commerical oil fields.
C&C Energia has a couple of Costayaco sized exploration prospects ~ 40 mmbo (50% net to CZE - 20 mmbo unrisked). These tow big Putuamyo propsects are company makers for CZE, as these oil fields that produce from the Villeta and Caballos reservoirs are averaging 2k bopd / well.
Reference Suroco's (15% net oil fields) that are in close proximity to CZE's southern Putumayo block.
On the large scale trend the Southern Putumayo blocks are located in the Cordellia Mountain Foothills trend, what I call the Putumayo Foothills Trend with includes Costayaco 40 mmbo - Orito 250 mmbo and Shushufundi 1 billion bo, Moqueta 25 mmbo, and Juanambu about 7 mmbo
Several Gran Tierra fields oil that were produuced in the late 1990's. Peak production on these fields are about 5k bopd and 5 - 10 mmbo .Gran Tierra stills produces from these 5 fields Mary, Linda, Miraflor, Topoyaco, and Guyuayaco.
All the wells listed here average 2k bopd / well and 4 - 5 mmbo / well, Orito has drilled over 120 wells, the per well modeling is about the same for the big fields and the small fields. The drilling costs on Putumayo wells is about $5 - $7 MM and 2k bopd provides $125 MM per day in OpEx cash flow. That means these Putumayo wells when successfull fully payout the $5 MM in drilling cost with 41 days of cash flow.
That's how Gran Tierra developed Costayaco, they drilled a new well every 41 days.
Exploration well risk (drilling costs) $5 MM/ well for 4 mmbo / well x $35 = $140 mmbo 2P NPV
An 18% chance of success on $140 MM is $25 MM risked / well. If 1 in 6 exploration wells is successful then $25 MM in drilling costs yields $140 MM in 2P NPV.
valuation model of peers
PMG is currently valued at $44 / bbl 20 NPV
GTE is currently valued at $33 / bbl 2P NPV |
