Richard,
>>Califtalk wants to keep the current management in place, despite the above facts. He is receiving numerous urgings from the AOL contingent (where you are not present, I notice?) to can them all and start anew. I don't see Califtalk as inclined to do that, though.<<
He isn't inclined to do that because he needs their expertise. They know the properties and what needs to be done. The people here and on AOL are not interested enough in Oilex to learn the facts about the current management nor the problems that they have encountered.
Production swabbing is a new technique regardless what S. Taylor says to the contrary. Managing these fleets and finding and training competent personnel in the oil patch is more difficult than one would think.
Current management has covered, from their own pockets, payroll and operating expenses over and above oil revenues for the past two years. They welcome Saul's entry into Oilex and look forward to working with him to bring swabbing production up to around 600 barrels a day and complete their planned infil drilling program of about 30 to 40 wells.
Drilling at Big Foot costs about $100k per well. Spacing at Big Foot was 20 acres on center and it will be reduced to 10 acre spacing. Total costs to fully develop Big Foot and Walker Queen will run about $4 to $5 million.
The new wells will use a variety of lifting methods including production swabbing. The interesting thing about production swabbing is that a well that may when completed produce under 20 barrels a day would be uneconomic using conventional lifting methods and would normally be abandoned by an operator as they move on to the next drilling location but would be economic to produce using portable production swabbing. This is a sea change in the decision making of the production engineer.
I would hope that the people here and on AOL would stop berating current management because they, the investors, were themselves taken in to invest in Oilex because a "chop shop" broker misrepresented Oilex stock to them without the knowledge of Oilex management. These inexperienced and rueful investors, I think, make up the bulk of the complainers here and on AOL. |
