addendum. Also thanks for the important information you posted in your astute analysis. good luck
Thanks for checking table calculation. Apparently he actually knows how to set up a spread sheet.
Hopefully the residual production from the previous drilled wells will make up the difference for less percentage of oil in this set of new wells. Even though there is variability in qtr to qtr production..that
should be expected...as long as we are reasonably close to the expected production numbers.
Hopefully we go up from here...Perhaps the hit has already been taken. Isn't the main strategy
based upon drilling many inexpensive wells and allowing residual production to increase dramatically as many new wells are drilled, thus increasing total production (not relying on the new well production as much? all imho Good luck
Correction line4 ...What is important is the % of oil for all the production
The Zeits tables show the average percentage of oil at the bottom.
For each well the percentage of oil is determined and listed under the % oil column.
Then I believe the % columns are averaged at the bottom.
What is important is the % off oil all the production. That should be calculated by summing up all the oil production and dividing by the total production for all the wells.
Example. Well A produces 2 barrels of oil and 8 boe...% oil is 20 %.
Well B produces 300 barrels of oil and 100 boe...% oil is 75%.
Average of the percentages of both wells is 20 + 75 / 2 = 47%.
But if you sum the total barrels of oil produced and divide by the total boe produced you get a different answer.
302 / 410 = approximately 75%. And that is the percentage that is meaningful...the total percentage of oil produced from all the wells with respect to total Boe production for all the wells.
Let me know if this is not correct. Good luck
If I am wrong...please let me know. Good luck
Sale will only be on for 2 hours....First come...First Served....People starting to rush in the doors (buyers)....Not much inventory left (sellers) imh
This is a very positive event...Lets see what happens in the regular session. Good luck
Thanks for the recommendation...I have become interested in trying to understand the complexities in understanding the impact of the residual oil production on profits. Some posters on the board predict that it will not be cost effective to produce from these wells after 3 years. Have you investigated the details regarding
how long these residual wells are profitable? Also, I believe SD share price is worth around $10-$16 per share based upon the recent purchase of Mid continent acreage, taking into account both acreage and production figures...do you concur with this estimate or do you think that the share value is lower? Good luck
I am not sure if the 1300 wells exclude the Miss Trust...you make a good point. I got the 1300 wells from a presentation slide on the companies web site. It showed 1300 wells drilled in the Mid continent. It was a very rough calculation and the 5 Mil a day from the set of 1300 wells does not take into account maintenance, pumping costs, overhead, transportation etc. But even if you subtract 20-30 profit from the 5 mil for these costs....its still a big number. Again, this was a rough calculation for production in the steady state for this set of wells (not taking into account the original drilling and exploratory costs). Good luck
If you look at a 10 year life cycle...isn't the original cost of drilling the wells (around 3 mil) already taken into account. If the wells actually have a 10 year life cycle, doesn't the profit from a set of residual wells kick into high gear? The drilling has already been paid for in previous quarters and you just have normal operational and pumping and overhead costs etc to subtract from the residual production. You have gone into a lot of good detail on your analysis...I will have to study it to understand all your calculations. But if there actually is a 10 year life cycle, then there is a lot of profit from these residual wells since you are pumping 5 million dollars worth of oil per day from the set. All imho
I am not sure how you did the calculation. I did a very rough calculation and I got an estimate of 65000 boe equivalent for each day for the residual 1300 wells. If you multiply 6500 boe by $80 (rough oil price) you get around $5 million dollars per day. This calculation assumes this is in the out years and the cost of the wells have already been taken into account. The other costs such as keeping the pumps going, and maintenance and transportation would reduce the profit from these residuals...but its still a big number.
I will have to study your calculation to understand all the details. Good luck
I thought that the residual production would add up to a lot of $...but I was surprised about how great the figures where when I did the rough calculation. I am not sure about how much it costs to keep each residual well in operation or bring the oil to market...but I am sure there is a lot of profit..even after subtracting these costs. Good luck
I would absolutely think that the banks would want to see current financial information and production information. imho Good luck
Agree with you that earnings need to be good for the stock to move upwards after earnings. I also think the stock could move up some before earnings. Good luck
Agree with you that earnings need to be good for the stock to move upwards after earnings. I also think the stock could move up some before earnings. Good luck
addendum. If you use $80 per barrel for the price of oil, the residual production gives around 5 million dollars per day (little less because of operational costs etc) in revenue. Not chump change. Imho Good luck longs
Hopefully the market will recognize the proven value of SD's resources. I once held a stock that was down to $1 per share. I had a large position which I sold (unfortunately). The stock increased 5 times in value over a period of 18 months. I don't want to do that again. Good luck
According to a SD slide presentation states 50there are already 1300 Mid continent wells.
I did a quick calculation to gauge the impact of these residual well for future years.
If you assume a steady state production in future years (greater than 2) of 50 BOE per day production for
each well ...you get a total 65,000 total residual production for the 1300 wells in future years(after they achieve
steady state). Now the average production for a new well in first year is 300 boe per day,
this residual production produces as much as 200 new wells (65000/300). This demonstrates the big impact of residual production. Residual production per well is increasing and lasting longer, so this production will have a big impact on earnings in future years. imho Good luck longs
addendum This was from the recently released statement that describes its increase in borrowing base.
From a recently released statement ...over 90% of the remainder of 2014 production is attractively hedged and the majority of liquid planned production for 2015 hedged at over $90. Good luck longs
Even though I think SD stock will move higher...expect volatility. The stock was always more volatile than many stocks but given the external international pressures, the volatile oil prices, and the ebola outbreak...I expect the volatility to continue. Good luck