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Thank you helpful for taking the time to explain.
Good luck all and a good Wednesday :)
Tier
the cashflow figures are generated in conjunction with the company's technical advisers.
NPV10 looks at the net cashflows over 20 years. NPV is Net Present Value. They discount the cashflows by a factor to reflect the time cost value of money. In the case of NPV10 the discount factor is 10% per annum.
So the NPV10 is an indication of what the future cashflows are worth now if you discount them by 10% pa. Just look it up there are plenty of references to this type of calculation and it is something you should be familiar with if you are going to be investing.
I don't understand your last calculations but if you look up Red Cave wells on the internet you will see that the initial production is around 48/50boepd. Because they are fracked wells, the initial rate drops off pretty quickly and then stabilises round 19 boepd. So if we drill 17 wells and the stabilised rate after the initial decline is 19 boepd then we end up with 17x19x0.75=242.25 boepd.
The initial cashflow surge plus the RBL permits companies to drill further wells without issuing further equity.
However, the Bivins Ranch deal is key to the company raising its profile in the Red Cave and Brown Dolomite assets around Borger/Amarillo. If we do a JV with someone we can transfer to them our carried forward unused Intangible Drilling Cost (IDCs). The value of the IDCs is about $5mil.
Hence the MOU the company has signed. That is the next big step. In effect we have IDCs worth $5mil on our balance sheet that we cannot make use of in the short term but doing a JV with the right party would mean we could use the IDCs as our capital into the JV.
The above is something that PA said he would look at and the arguments have been rehearsed on here multiple times. In this case of instead of using the IDCs to secure private investor partners for new drills in the Austin we are seeking to use them in a JV but otherwise remain pretty much the same.
DYOR
Or you actually mean they’ll speed up the production rate to 50 a day?
Helpful (or anyone), I need help understanding the figures. Sorry that I’m thick.
17 wells, 29500 drill cost
Total reserves 945585
$26934571 cash flow @$50 (how to get to this figure?)
PV10 $7.25 mil @$50 (how?)
$7.25 mil for the whole lifespan of 20 years? $7.25 mil is sort of net profit, after all the expenses?
Yearly production per well,
945585/20/17 = 2781
Daily production,
2781/365 = 7.619
Where does the 50 barrels per day come from?
Complicated for someone not in the industry. Joke is on me thicko :))) it’s absolutely fine.
Not at all. The last thing you would want to do is turn the production off. As the company has previously stated, it will continue to seek to maximise revenue. You want all the assets producing as much as they can up to the day that they are sold. I don't know but if it were me I would still be looking to do stuff to improve production. I think that there are wells at ZR that can be brought back online that are not yet producing. If I remember rightly I think there are 18 and we have dealt with 12 or we had last time they were mentioned.
DYOR
Does that means we’re not producing anything right now as the assets are up for sale?
Thanks for clarifying.
I did not quite know how I should feel. still don’t, though it’s clearer now.
PS you do really have to ask yourself why someone with 25,000 acres wants to bother with Attis?
Ideally, we would end up with a JV that means we are the operator, provide the well services, do all the planning and drilling and have a decent NRI.
Anyway, to be seen what happens.
DYOR
About $290k to drill each one not buy them. We have a lease with 17 drill targets on. They would normally be done in batches of four and take only a few days to drill each one. They can be put on production immediately they are drilled. Initial production you would expect to be around 50 boepd. A big attraction is that they produce gas as well as oil and locally natural gas sells at a premium.
The wells need fracking and the cold weather means that they fluids need to be heated which puts the costs up: hence the delay to April to drill the first batch of four.
No idea on what ZR and Austin will sell for but more than enough to get drilling in the Red Cave. We would need about $1.2mil for the first four. The SWD can generate income in the short term.
Once we have the first four done then RBL kicks in.
If you read the RNS I think that the next news will be re the MOU/NDA. For Austin/ZR to be sold will take till December/January.
In line with this refocus, the Company has entered into a Mutual Non-Disclosure Agreement and accompanying 30 day Memorandum of Understanding ("MOU") with an owner and operator of approx. 25,000 leasehold acres in the Texas Panhandle. The MOU allows the Company to conduct due diligence over the acreage, determine feasibility, and, if satisfactory, enter into good faith negotiations on structure, and mutually acceptable terms for a potential transaction.
The company didn't enter into the MOU today and so there is less than 30 days left. Something may happen or it may not.
DYOR
It’s a serious question... I just want to confirm. Anyone?
So am I right that $295000 x 17 is needed to buy these wells? How to fund this?
When do you think the next news will be?
Also how much can we sell the packaged assets for, AF, ZR, FW? I know it’s only a guesstimate but roughly?
Helpful? Care to share?
You expect a lot helpful tbf, none of it seems to happen though.
this is now worse than a punt stock, needs a miracle.
You seem very keen to run the company down and maybe a little bit desperate. Did you get caught out by your little friend giving you the steer that there was going to be a placing?
Well you can give it a rest on a placing for a little while now. You will have to think of something else to abuse everyone else about.
Fingers crossed we get some very good news on this MOU/NDA they have signed sooner rather than later.
DYOR
PS don't forget that the revenues from the services contracts started to kick in from September and we should now be doing quite well out of them. I expect that we will be picking up more well services contracts soon.
Good to see Charlie put his hand in his pocket to support the loan facility.... oh wait he didn't! This guy has to go ...
Is just p#ss and wind. Only hope here is PQE rockets and that's a long shot imo dyor blah blah blah......
Even then give these idiots money and they will only blow it. It's a joke company