Wednesday, January 29, 2014

Current Activity

This latest "completion lull" should soon be coming to an end.  Results for the wells below should be announced in the weeks ahead.



6 comments:

  1. Do we have long term production rates for wells like Horseshoe Hill? Thanks.

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  2. Great question. On some of the blogs, it has been suggested that the Crosby well is the only one to have paid for itself. I am not sure.

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  3. According to GDP's last presentation, well payback is projected as follows based on what they have seen so far in the TMS: $13mm single well - 800k EUR payback 1.7 yrs. - 600k EUR payback 2.5 yrs. - $10mm developmental well - 800k EUR payback 1 year - 600k EUR payback 1.7 yrs at NYMEX $95 per barrel. These are current projections, since most wells are less than 2 years old they are still watching to see if their EUR models (particularly the decline rates) are accurate. Their presentation also cites the cumulative production of many of the wells and their projected EUR's are graphed. Comparisons to the EF and Baaken are encouraging. Some of the wells will payout within the 1st 24 months. Unfortunately many wells have cost more than $13million. I would not pre-judge the future profitability of the TMS on the early wells where the cost were higher due to experimentation and mistakes. Hopefully they will get to the average well cost of $10 million. The EUR modeling seems to be accurate so far on the older wells and the price of TMS oil has held well above the $95 used in their projections. I would say they are enouraged with the well results so far despite having some drilling and completion issues. I believe the operators are optimistic that economics are improving as they learn more and as more service infrastructure move in. Their modeling is proving accurate so far. The jury is still out of course but their is no reason at this point to be negative about the TMS. If you see GDP's stock price drop to just above $0 you should worry. IMO

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  4. The Horseshoe Hill produced 105K barrels in the 1st 20 months and is tracking the 400k EUR type curve but has produced 20k barrels per 1000 ft. of completed lateral, which is one of the very best wells in that category. Their are 4 wells tracking the 800k EUR type curve at this point - the Goodrich Smith and Crosby and the Encana Anderson 17H2 and 18H1. Most other wells are tracking the +400k to +600k EUR type curve.

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  5. Thanks, Free Medicine. That is a great summary. I am going to check out Goodrich's latest presentation.

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  6. #3 is located in the right place on the map, but it's name is CMR 8-5 rather than CMR/Foster Creek 8-5. These are two different wells.

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