Some thoughts on tie-up with Ritchie Exploration2 Apr 2026 00:09
Some thoughts on tie-up with Ritchie Exploration
MDH are to fund the recompletion of the Schneweis well. This well was abandoned due to water, but MDH have a proven technique in the Rost 1-26.
The arrangement with Ritchie Exploration is that MDH fund the recompletion of the Schneweis well and receive 85% net profit interest, then after MDH have recovered 110% of their investment in the Schneweis well, MDH receive 70%. If Ritchie Exploration would like to earn 50% and we drop from 70% to 50% then Ritchie Exploration, must pay MDH 50% of our investment.
Our CEO, Nick Tulloch has said in several RNS’s that the relationship with “a local well owner” (now we know it is Ritchie Exploration) that it would be quicker than drilling a new well.
We currently do not know how much it will cost to recomplete the Schneweis well, but we know it is cheaper than drilling a new well.
For example, “pretend” it costs $600,000 (just to see how the 85%, 75% & 50% split would work) and the revenue is $800,000 a year (it could be more and it could be less) I have used $800,000 as it is easier to calculate.
As the Schneweis well is next to a pipeline then there is no requirement for helium purification facilities at surface and production revenues may include hydrocarbons as well as helium. (no requirement for a tube trailer)
MDH outlay $600,000
Revenue $800,000 split MDH 85% Per Month $56,667 Ritchie 15% $10,000
In 11 months MDH would fully recover their costs 11* $56,667 = $623,333 ($23,000 more than what is due: $600,000)
In 12 months MDH would have recovered 110% of their costs $680,000 (MDH would be due only $6660,000)
In 11 months Ritchie would have received 11* $10,000 = $110,000 in 12 months Ritchie would have had $120,000
If Ritchie want to go to 30% they would need to pay MDH 50% of $600,000 ie. $300,000 MDH would have a free carry on 70% which in the example above would be $560,000 a year.
If you DYOR it could increase your wealth.
RKB
PS Ritchie Exploration, Inc. is a family owned oil and gas operator headquartered in Wichita, Kansas, with an operating history of almost 50 years. With 461 producing wells, 63 salt water disposal wells and monthly production of 37,900 barrels of oil and 27,800 Mcf of gas, Ritchie is one of the most significant regional operators in Kansas' oil and gas sector.
Sign In
Follow the stocks
