The company has changed its fracturing technique at the Viking formation to a shorter configuration, the new configuration reduces costs by 200K per well, the configuration also reduces EUR from 86K-113K to 72K-95K, however it increases potential viking locations from 90+ to 150+.
Utilizing the old method, Viking total EURs stood at: 7.746m to 10.174m barrels Utilizing new method, Viking total EURs stand at: 10.8m to 14.25m barrels
So while single EURs per well decreased by an average of 18-19%, total EURs increased by 39.4% to 40%, thus effectively increasing Viking reserves by 40%.
NPVs are not exactly comparable, because they are using a different price point, in October they were using lower crude oil price assumptions; however if you use the new 150 wells count, and the new price assumptions, NPV for the Viking has increased from $36m-$126m to $120m-$240m.
The increase in Viking has been offset to a large extent by a decrease in locations at Hunton from 50 to 40, however the reduction in Hunton was due to last year aggressive drilling to maintain the Mississippian, the Mississippian can add potentially close to 100 locations at 160 miles spacing (Chesapeake configuration).
By looking at the stock price, you wouldn’t know it, but current management is creating shareholder value, I believe the Mississippian deal will shade some light on the company, and alert potential shareholders that there is plenty of value here beyond the Mississippian.