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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: WillW who wrote (181763)	12/18/2013 7:20:29 AM
From: Ed Ajootian	Read Replies (1) \| Respond to of 206209

WillW, I don't know the direct answer to your great question, but according to Torchlight's presentation they are expecting these wells to reach payout in 7-12 months, and I'm pretty sure those figures are "all-in". From the fact that these wells are able to unload at least a portion of the huge amounts of fluids used for the frac and even produce a little bit just flowing on their own, infers that the water cut in the formation couldn't be all that high. Not all carbonate formations produce at such a high water cut as the Miss. Lime. Its been awhile since I looked at Sandridge but from memory I thought they had the Miss. Lime water situation handled pretty well. Something like having to drill 1 SWD well @ $2M for every 10 producers, and then the LOE per barrel of oil produced might be a buck or so higher than it would have been if no water were produced, in order to maintain the SWD well. Is that no longer the case? Are they finding that the water is engulfing the oil in the latter stages of a Miss. Lime well's life? If they get more wells like the Mid-Con 6H well that was described in the latest GST PR, TRCH may have to revise this payout range down. These wells cost about $5M to drill and complete and the Mid-Con 6H well produced an average of 1,300 boepd (78% oil) in the 26 days since its peak IP rate. Assuming a 25% mineral owner's royalty and making other reasonable assumptions of commodity prices and LOE, this means that during that time period alone it paid out about a third of its costs.