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SandRidge Energy, Inc. Message Board

  • stockjunkie26 stockjunkie26 Jun 21, 2013 10:44 AM Flag

    Second Qtr Wells Part 2

    Had to play with the data a little more to get a sense of revenue per well from the new wells being drilled in the second quarter. I used the type curve to determine a three year revenue analysis on the wells (i.e. initial decline of 76% for oil and 62% for oil...I extrapolated the declines on a monthly basis for a three year period and I used $98/oil and $4.00 Nat gas for the period..I chose three years because I felt the declines in that period were probably more predictable.....Given that this year both oil/gas are hedged at those prices or higher I felt my pricing for oil/gas was appropriate....You could argue for lower or higher oil/gas prices in year 2 and 3 so I chose these numbers for this analysis.....The "average" well will produce $6.254M in revenue in year one (I did not factor in any NGL revenue as I did not have enough information to do that)...For the three year period - total revenue is $10.251M.....From a cash perspective and I would defer to the board if we have an accountant in the mix - I took the cost per BOE and sucked out what should be non cash related items like DD+A...It would appear these new wells cash flow positive in just over 11 months if my assessment is accurate....Just to throw a number out there - the 90 wells generate $562.86M in revenue in year one....The market does not care right now about any of don't expect the stock to move, all of this will take more time than most want to wait.....If we have true multipay potential in this core area we are drilling in - then we are in much better shape than most would give us credit for........Comments/suggestions welcome.......all IMHO.....Good luck longs.....

    Sentiment: Hold

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