Hi Peter I don't remember DNR projecting 33% annual oil production increases in each of the next 5 years from existing properties (slide 12). I was able to confirm with DNR IR that the uprade at Jackson Dome facility has been completed. I was also told to expect a news release on N. Lorette field within next two weeks. Only remaining concern is the TPG overhang.
Thanks for your kind reply. The CO2 business model chart you reference has been in every DNR presentation for the last year. I apologize for not being able to post a comparable one but they have eliminated all of the prior presentations on the site.
I recall your having a giant problem with the lack of production increases two weeks ago. Now you appear before us with the following statement:
"I don't remember DNR projecting 33% annual oil production increases in each of the next 5 years from existing properties (slide 12)."
DNR is most emphatically not projecting 33% annual increases in oil production from existing properties.
They are projecting 33% annual increases from the CO2 tertiary recovery program which is about 1/3 of current oil production. Currently, DNR produces about 19,000 BOPD. They are projecting an increase from CO2 tertiary recovery next year of about 2000 BOPD or approximately a 10% increase--a great answer, incidentally. Subsequent yearly increases, all other things being equal, would be similar and also great but not 33%.
You are correct that slide 12 refers only to CO2 fields. My observation was that I don't remember annual production increases from these existing fields being projected as high as 33%. Is this an improved projection (possibly due to the Jackson Dome upgrade), or is my memory going downhill?
I am still concerned about 2003 diminished production-to-market vs 2002. The Lehman Bros presentation reiterated that the 2003 exit rate should be equal to, if not slightly better than 2002. With that, I've re-established a 50% position at these prices. I'll wait for TPGs next shoe to fall before fully committing myself.