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Linn Energy, LLC Message Board

  • rlp2451 rlp2451 Nov 25, 2012 3:44 PM Flag

    4.0% Return on Bakken Wells

    $11,000,000 initial investment
    $20,000.000 return (ND Oil & Gas)
    45 year time frame

    Sounds pretty low to me.

    Even if one uses Sand's super-optimistic inflated profit, the return is still only 6.6%.

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    • Whiting has some easy to understand data that includes return on Bakken & three forks wells and even breaks it down by oil fiels like Sanish.

      So take a look at the Whiting November presentation and just pick one of the slides like:

      EUR - 600 MBOE , Development Phase CAPEX $7 MM
      Nymex oil price/Bbl $80 $90 $100
      ROI 3.2 3.7 4.2
      IRR (%) 107% 155% 213%
      Payout (Yrs.) 1.0 0.9 0.8

      I am looking and looking but I see 107% IRR at $80 oil

      I see they have 155% IRR at $90 oil

      Lets not even consider $100 oil since it has not been there in a while.

      I just do not see your 4% or 6.6% number anywhere there, so where did you get that from....just make it up?

    • So, you did it again.

      You just divided an even $20,000,000 by 45 yrs and call that your return?
      And, you did it after what you did the first time was already pointed out.

      When you post that kind of skewed number instead of the numbers or IRRs that operators are actually getting it reveals for everyone...............

      ................... to see that your post is intentionally misleading BECAUSE....everyone already read about your decline rate curve nonsense and therefore knows that you already know that the wells pay out much faster in the front when you post a return of 6% readers who notice just laugh at your attempt to mislead.

      Now, why would you do something like that?

      LINE is a good example....they had a 70% IRR and adjusted it to a 50% in a more recent presentation..

      ....yet you would like to play-pretend and prefer to call that a 6% and yet somehow you do not think readers here are smart enough not to check the nonsense you write with the Bakken operators numbers?

    • Time value of money?

      Of course it's primitive mind does not grasp the relationship between IP even as it goes on and on about decline rates.

      Even though it is here day and night it does not seek to understand or learn. There is a word which describes such rudimentary behavior. Progressive.