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Because the opex is mainly a fixed cost, the only variable is transport of the oil. The lease costs, manpower, electricity, diesel , the operators overhead, security, land rental etc are the same regardless of whether you produce 50 barrels or 500.. the only difference are the number of tankers.
They have stated various opex costs based on the target 500/day. (£6, $8-9 and $10) So it’s clear that if your producing only 100/day rather than 500 that the opex per barrel will be higher..
Using an extreme example, if they were producing 25/day would the opex costs be only £150 per day if it’s £6/bbl. ?clearly not.
Mr Investment
The only variable cost I can see is the tankerage. All other costs are fixed e.g. site lease, wages, administration, overheads, business rates, utilities, and depreciation of plant and equipment. So you have to divide your fixed and variable costs by the number of barrels you sell to get a cost per barrel. If the variable bit is a low fraction of overall costs, then the cost per barrel goes up as the number of barrels goes down, surely?
Cost per barrel is the determining factor for abandoning an oilfield if it exceeds the income per barrel.
Mr Investment, the problem is that the operator Egdon wants to use the cash flow from the Ashover Grit production to finance the development of the Pen*stone flags formation at a more optimal well location. So UJO will have to pony up its share of that. I am not sure that the sale of oil from Wressle at the moment is going to contribute much to UJO overheads in that situation.
Also, presumably the opex "per barrel" at 120 bbls/d is 4 times what it might be at 500 bbls/d, so it's not even sure any profit is being made at the moment with such a low free flow.
It's the proppant squeeze that matters and it is hydraulic fracturing after all, so the anti frackers will be out blocking traffic movements just like Preston New Road in 2019/20, tying up dozens of police officers.
Best to forget about Wressle and ask what on earth is preventing the extended well tests at West Newton, where all the value exists.
Do not forget to add on Keddington and Fiskerton. It all adds up.
I have every confidence with the advice the JV took for methods to flow this, that we will achieve.
My favourite part is yet to come.. all rise the Penn-1 st one s.. watch those babies flow.
And the best bit is, we are in to March next week. And there before us sits the almighty West Newton. I bet Rathlin already know what is the timetable and they will roll in the equipment safely and efficiently. Now that will be quite something. Followed by...drum roll please...Biscathorpe.
And in the meantime the news is full of Race to Zero, COP26s, Hydrogen, Wind, you name it..
I have no doubt that they can increase the flow with the actions stated, but with a current rate of 100-150bopd, some 1/3 higher than when first tested (not checked if this is the case), is it feasible that this could increase by more than 3-fold to the 500bopd that was RNS'd as an anticipated, constrained amount?
Don't forget that several posters here have suggested that without the consraints that Wressle would flow around 700-1k bopd.
I think some people are perhaps being over-confident with expectations here.
UJO's share was an anticiapted 200bopd, considerably higher than the current reported rates.
Whilst the income is great, and to get this far is a good effort all round, these 'reported' figures seem disappointng given the previous RNS declarations of potential.
Hopefully, we will have firm figures released in due course - perhaps it is still too early to make an informed judgement here?
The market will want some certainty before we see any real impact to the SP, imo.
Good weekend all
'No more applications for the CLG will be considered from this point. The numbers required has been fulfilled.'
Facebook site re Egdon
You don't sell tickets if the big event isn't going ahead.
'the Oil King' - staring Dave - Wressle's finest performer, is about to begin.
All that hype for 150bopd is how i see it.
Leaving 20% on
All the best .
Another save
Heid ring uncle Davy, pretty please , ask him to hold the rns 16th of March would be nice
:))
One of my others now has it on its website , deal to complete 15th, nice top up slice coming
did not expect to top up again here sub 0.2
Hold the bus, train, chariot , whatever
LOL
'Save your banners for another day.'
Tune in to the close handsome ?
https://www.youtube.com/watch?v=XXYlFuWEuKI&list=RDMMXXYlFuWEuKI&start_radio=1
You sound like Hull Pete. I can hear his little accent as I read your post.
If its only flowing @ say 120 bpd then this will be heading south as the market is expecting more. I think many will sell as the only research they have done is read bulletin boards and fallen for the 500bpd off the bat guff spread by some here and elsewhere. Im not saying this won't be achieved. Unfortunately this stock is retail lead and many retail investors are headless chickens. Imo.
The price should be moving north if oil is flowing. I'm starting to think its all a big money grabbing scheme tbh. Give the shareholders hope by building them a pump run off into the sunset with remaining cash and onto the next. Hmmmm ??
Daniel knows his stuff. So I guess we should be happy it's good news.
Yes. But what choice have I here ? I have my holding and I see big potential and I am always honest.
are people not concerned that yet again our newsflow comes from twitter and not one of the JV companies ???
Good news. Get the squeeze and flow rates will increase. Nice earner for all concerned and great job executed professionally and safely. That is one of the main things here.
i liked the dell boy one a whip round on the bus could i do that to help against my losses.
the man with the inside information says oil flow 100/150bopd with over 2000 barrels sold.
https://twitter.com/BrokermanDaniel/status/1365268522620887040
Can they sell pre delivery or how many times would deliveries would that have been? Did someone say one run is about 200 barrels - so 10, call it 12, if limited on site storage. does that seem likely?
Must be true, on twatter.
Result is in
64% of voters think it is flowing at 120bopd or less.
https://twitter.com/WealdOilers/status/1364873112492343297?s=19