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Contango Oil & Gas Company Message Board

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  • lexpress56 lexpress56 Jul 2, 2007 11:19 AM Flag

    Dutch - 400 mmcf/day?

    I am not sure I understand your math. Doesnt the press release suggest all 300 a day will come from NEW wells ("the Mary Rose #1 and an additional 3-5 wells"). If true, and this count does not include the Dutch #1-3 wells ("expected to produce 90 to 110 a day through the Eugene Island platform"), doesnt this release suggest Peak thinks the total dutch production is close to 400 a day? What is the difference between these calculations and your posting with the 270 a day figure (that is, what am I missing?).

    FYI, here is the section of the press release I am commenting on:

    The Dutch #1, #2 and #3 wells are expected to produce at a combined rate of 90 to 110 million cubic feet equivalent per day ("Mmcfe/d") through the Eugene Island 24 production platform. The Dutch #2 well is expected to begin producing by August 2007, and the Dutch #3 well is expected to begin producing by October 2007.

    Upon completion and testing of the Dutch #3 well, the Company expects to begin drilling the Mary Rose #1 well, located in Louisiana state waters, in late July 2007. A production platform and pipeline, at an estimated cost of $35 million, with a capacity of 300 Mmcfe/d is being built by the Company to process and transport anticipated production from the Mary Rose #1 well and from an expected additional three to five wells.

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    • No, you misunderstood what I was saying in my post (probably because I wasn't very clear). I was saying that even at 270 mmcf/d, it's going to be bigger than they have announced thus far. At 400 mmcf/d it would be on the order of 750 bcf - 1 tcf reserves, in total. But I didn't use the 400 mmcf/d in my post because I was using the fact that we know it's got to be AT LEAST LARGER than 270 mmcf/d or else why would they have increased the size of the pipeline? So we know the minimum they expect is greater than 270 mmcf/d. That's HUUUUUGGGEEE!

      • 3 Replies to valueguy36
      • Yes, but how do you translate the fact that they are going to have a certain pipeline capacity into the fact that they expect the total size of the find to be "HUGE"????

        Doesn't the figures they have already provided for proved plus probable reserves reflect the company's expected information about the eventual expected size of Dutch/Mary Rose?

        Please elaborate...

      • Valueguy,

        What led you to conclude that the reserve is in order of 750 to 1 trillion? Just because 400mmcf/d? There are could be couple of other reasons to make the output that large. Appreciated for your input.

        hz

      • I always felt you were indicating the discovery was going to be larger than first thought...the "?" mark after 400mmcf/day made it clear. The point was that Peak thinks it's going to be alot bigger and that's what is important!
        Nevertheless, the discussion was great and hopefully there will be alot more as Contango heads toward a $1B+ company.
        This is just a terrific opportunity for anyone interested in buying a stock with a great future cheaply(it will not always be that way!) Good luck to all....

    • That's the way I read it as well�Mary Rose #1 and three to five "additional" (i.e., new) wells.

      • 1 Reply to billj4
      • From the April 24, 2007 press release:

        "The Dutch #3 and the Mary Rose #1 are planned to flow into a platform currently under construction. The platform will have a capacity of 160 MMcfe/d, and is expected to be delivered in fall 2007, at an anticipated 8/8ths cost of $25 million."

        It appears to me that a decision was made at some point after April 24 to route Dutch #3's production to the platform currently handling Dutch #1 (and soon Dutch #2.) What I don't know is if the company had originally intended three platforms (instead of two) to service the Dutch/Mary Rose prospect (the third platform being designed to handle Mary Rose wells #2-#?) and later determined that two total platforms could do the job. This is purely hypothetical from my vantage point--I don't know. But I don't think one can conclude for certain that the capacity increase for the second platform slated for completion this fall is huge news unless Contango never intended a third platform. The enterprising investor can probably clear things up with a phone call to Ken.

        Had the latest press release stated that Dutch #3 and Mary Rose #1 would both flow to this to-be-completed platform (no change from prior plans) and the capacity was moving from 160 to 300--that would definitely be significant. But that production/platform relationship has apparently changed.

        That said, all disclosures from Contango that I've read suggest that Dutch/Mary Rose is a fantastic find. The above comments are just my attempt at processing the information as objectively as possible.

 
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