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Not my tool. https://geology.com/royalty/
My own comparator is a well that another company I have shares in. That was running at 12-15mmcfd, and generating $800,00 a month, for a 64% share, at $3/mmcfd. So $1.2m/month for 100%.
Multiply that by 4 for Cascadura = $4.8m, times our 80% holding = $3.84m / month = $46.08m per year.
That's just for the gas.
Add in COHO at say $800,000 (slightly lower flow than my comparator, but a higher %, that's another $10m/annum.
So $56m / annum, minus operating costs, just for the gas we have found so far (i.e. no second well at Casca).
Adding in your $20m+ for condensates = a lot of income!
Thanks Highland Matt for your tool calculations, not bad for one well?
If Chinook comes in as anticipated, that is 3 times as big, according to Paul's conservative estimation.
If that happens, a number of us will be going on a site inspection.
I take your point about well depletion, and hope that Shell's nearby Carapal Ridge is a useful comparator.
Don't forget that we haven't even got down to the oil layer yet.
We are only just beginning our market re-rate, my year end target is £1.50 and I think that is conservative if we get a fair wind.
The analysts will take a while to catch up with me!
@Dana - your numbers look about right to me.
I found the below tool, which is designed for a different purpose, but it seems to work out right, just for the gas, without adding in the condensates. (80% ownership, 60mmcfd, $3/mmcfd)
Natural Gas Royalty Estimate
Here is the data that you entered
80 Your royalty rate.
$3.00 Average wellhead gas price.
60 Average well production rate in millions of cubic feet per day.
1 Acres you own within the well's production unit.
1 Number of acres in the well's production unit.
$4,320,000.00 Your expected royalty payment per MONTH (before expenses).
Calculate another royalty
Don't assume that you are rich yet. Learn about natural gas well decline rates
This information is provided by Geology.com for entertainment purposes. The amount of your actual royalty can differ significantly from what is shown above. The royalty payment above is based upon the information that you provided. It includes assumptions which might not fully represent the conditions of your lease/royalty agreement and market conditions at the time your gas goes to sale.
Either buy more, or hold long and strong, depending if you have cash available. The next year will be very interesting.
I'm looking forward to finding out how far off my figures are from the experts.
I think I have been conservative. If my 5 x multiplier is too low, then we are on a roll.....
From last week.
Stage two flow testing supports an initial production range between 7,750 and 9,700 barrels of oil equivalent per day ("boe/d"), including an estimated 40 to 50 million cubic feet per day ("MMcf/d") of natural gas and an estimated 1,100 to 1,400 barrels per day ("bbls/d") of natural gas liquids, significantly exceeding pre-drill expectations.
The second stage of production testing commenced on March 8, 2020 and achieved a peak flowback rate of 5,760 boe/d, including 29.4 MMcf/d of natural gas and 865 bbls/d of natural gas liquids.
We are going to have two producing wells here, with potential for a deeper find of more oil beneath the existing discovery.
Rather than just doubling the figures, I am going for 150% of one well to err on the safe side, even though max drawdown had negligible pressure drop.
Gas at say 45 Mmcf/day x 1.5 = 67.5 Mmcf/d at say $3,000 per Mm = $202,500 per day no SPT (I understand that $3,000 is the current price in T&T).
Oil condensates 1,250 bpd x 1.5 = 1,875 bopd at say $35 (we may get a premium) = $65,625 per day
Total = $268,125 per day with low prices. We get 80% = $214,500 per day, in a low price environment.
Let's knock off $14,500 per day production costs so $200,000 per day x 365 = $73,000,000 per annum.
No, let's be really conservative and call it $65 million per annum from Cascadura.
This has to be worth a minimum of 5 x which equals $325 million, and if we hit a bigger one with Chinook then 3 x that again.
That is what is known as a 'Wall of cash'. $325,000,000 divided by 183 million shares = $1.8 usd per share = £1.50 per share.
Please feel free to refute my numbers, these are for discussion purposes, and only for Cascadura.
Add on value of existing wells plus Coho say 30 pence per share.