its other name is natural gasoline, currently priced at $20+/MMBTU, means $120+/BOE, higher than oil price. It is mainly used for diluting heavy oil to make heavy oil flow better in pipeline. So its price is the highest one.
DEJ condensate/oil percentage is higher than other piceance operators'. for example, BBG claimed 7% while DEJ's is 7.2-9.0% based on 12-15 BBLS/MMCF (12 or 15 divided by 167).
DEJ's gas is richer than other Piceance operators. For example, ECA presentation said 1.120-1.140 MMBTU/MCF. Dry gas is 1.000MMBTU/MCF. If the gas is 1.100MMBTU/MCF operator will get 50 BBLS NGL from 1MMCF gas and if the gas is 1.200 MMBTU/MCF the operator can get 100BBLs NGL from 1MMCF gas. That means DEJ can get 90BBLs NGL/MMCF while ECA can get only 60-70BBLs/MMCF.
Propane, ethane, butane and isobutane:
Current ethane rejection makes ethance sold with gas. Propane price is increasing every week. Four weeks ago, it priced at $0.86/GAL, three weeks ago it priced at $0.93/Gal, lask week it priced at $1.09/Gal and yesterday report it priced at $1.11/Gal, almost 2-year high. Butane and Isobutane price are higher than Propane.
Generally, the amount of propane, butane and isobutane together equals to ethane amount. Now we can calculate how many Gals of propane and butanes in 1MMCF. 90BBL-12 or 15BBL condensate, then divided by 2. Means 37-39BBLs/MMCF, or 1130-1191 Gals. After NGL extraction, but with ethane in gas, the volume shrinkage is about 10%.
Now, we can get DEJ price from 1MMCF, $3500 x 0.9 (gas revenue) plus $1.11 x 1160 (propane and butanes revenue) plus $120 x 13.5 (condensate revenue), total at $6058, means about $6/MCF. It is the upper end of DEJ August presentation in which it said NGL will add value $1.2-2.5/MCF. Now we get exactly $2.5.
Like I said in some other posts, DEJ is in the best area of Piceance. Now we get production/well than average (average is 1MMCF/D per well). we get higher BTU gas and higher condensate/oil percent.
canada has season-dependent drilling limitation, but in USA I did not notice such restrictions, especially in the producing field.
For the HZ, we need permit first. generally, permit is not a problem because state can get money from the drilling/production, but need take some time for paperwork. Then we need fund, now the fund should be easily got after Koko production because any fund wants to get 150% payback in about one year. finally drill and complete, now DEJ knows wich company is doing best job in piceance, so DEJ will do the turn key contract again.