Move in the right direction. But still way too low even after a 40% revenue bump. We are heading over $50 million in 2014.
Booleansearcher, you seem to want to comment on this company and yet you seem to know so little about it. The first quarter is going to be a blow out quarter on the top and bottom line. They are adding production from 5 new Buda wells this quarter. More than enough to offset declines in the Buda and substantially grow production again. January was a better month for Bakken production than December, when there were five major snow storms in western North Dakota. Oil prices are higher and USEG is only half hedged for oil. Natural gas prices are much higher and USEG is unhedged for natural gas.
I was more cautious than most for the fourth quarter due to the weather in North Dakota. I am sky high bullish on the first quarter and predict revenue in excess of $12 MILLION (maybe more when we see the actual results) and net profits after tax of over 10 cents per share. The second quarter will include growth from 2 rigs drilling in the Buda.
Beeler #6, #7, and #8 all have positive flow rates (undefined). The Willerson #2 also has positive flow rates. We will get 30 day rates on all four wells when they release their next operations update.
The Beeler #2 had February production down a little bit from Janaury. When one factors in three less days in February it looks like the well had stable flow rates compared to Janaury.
That happened in the first quarter based on lower oil prices. Some of their proven undeveloped Bakken wells were not economic with oil under $90, because well costs rose to $12 million at the time.
Perhaps the bust in the gas volume is the difference between gas produced and gas sold. Pocilujko is the resident expert in this area. For example, I do not believe any of the gas produced by U.S. Enercorp in the fourth quarter was sold.
Profits from oil and gas after depreciation rose to $3.3 million in the fourth quarter, up from $2.5 million in the third quarter. This despite average realized prices per BOE falling from $84 in the third quarter to $75 in the fourth quarter (good call Oily on estimating $75 per BOE for the fourth quarter).
Again, this is an outstanding performance and shows the potential of the Buda wells to drive both revenues and profits.
Thanks for the updates Ed. Contango has drilling times down to three weeks. They must have more than 30 to 40 more wells to drill to justify bringing in a second rig.
Dunlap well...saying you are not doing something you never said you were doing is not material...looks like USEG is probably involved somehow in whatever Crimson is doing.
Something to think about. No one knows more about how the USEG participated Buda wells are going than Contango. And they have decided to add a second rig even though they have other options.
Contango just broke to a new high for the year after earnings. USEG is next after they report (or maybe before).
The market-cap of USEG is $110 million. The potential PV-10 in the Buda is $280 million ($10) per share based on 160 acre spacing, $100 WTI, and $4 million per well. The average IRR per well is approaching 300%.
Could there be upside to those numbers? WTI is currently over $100 and well costs are now down to $2.6 million per well. They may be able to go down to 80 acre spacing. The K.M. Ranch lease may also be prospective for the Buda. They may be able to add additional acreage in the area.
That's just the Buda. Contango in its latest presentation started talking up the value of the Eagle Ford on the same lease.
I looked at this message board Sunday morning and nothing. This morning I had to wade through four pages of posts instigated by people that want my TIGHTLY held shares. If you want a few of them start with a bid of $10 and I might consider a little diversification.
They probably didn't reach 850 BOPD in the fourth quarter. The winter has been brutal since late November. One CEO commented consistent 20 degrees below zero weather and 5 major snowstorms. Most of this oilis trucked and big snowstorms matter.
A couple of new pieces of information.
The Beeler #8 is producing and like the Beeler #7 initial rates positive.
They now post an IRR of 214% for Buda wells based on 400 EUR, $100 oil, and $4 million well costs. With well costs closer to $3 million Keith said the IRR's rise toward 300%.
They now have the $8 million for acquisitions listed as acquisition/accelerated development and mention in their slides that Contango is considering adding a second rig.
He mentioned they were trying to "explore" and prove up their properties in 2014. Makes me think they may try and Eagle Ford well before the year is over. I wouldn't put any stock in the lack of mention of a second rig. Alan seemed a little dis-jointed and not as energetic as he was last week in Florida.
I liked when he said in the Buda when you hit one of these natural fractures....Wow!