13:21 29/05/2011 NCR flow rates I spent a few hours going through RNS's and presentations, trying to work out the impact the improved flow rates in NCR can have in Range's development.
Looking at the last Half Year Accounts, it seems that the net income from NCR for the period 1st July 2010 - 31 Dec 2010 is $456,522 (page 11 below)
http://www.asx.com.au/asxpdf/20110317/pdf/41xhgd5mdnv451.pdf
I couldn't find the production for this 6 month period, so the closest I have is geoff's link below, where it shows that 363,725 (MCF) and 24,010 (BBL) were produced.
http://www.iii.co.uk/investment/...0&action=detail&id=8105397
Comparing the production figures from the link above for the period 1st Oct 2010 - 31 Dec 2010 (209,998 (MCF) and 10,996 (BBL)) to the company's Quarterly Report below for the same period (235,000 (MCF) and 11,597 (BBL), there seems to be a small discrepancy in the region of 5-10%, which is not material to the point I am trying to make.
http://www.asx.com.au/asxpdf/20110131/pdf/41whwfzy3d4yn0.pdf
As I said above, the company made circa $450k in 6 months from NCR, from a production of 363,725 (MCF) and 24,010 (BBL). If we devide these figures by 182, we can get a rouph idea about the daily production. That comes to 1,998 (MCF) and 132 (BBL) per day.These daily production rates give the company something like $900k net income from NCR per year.
Following the recent fraccing, we were told that we achieved 9.3 MMcf and 800 bbl of oil per day for March. We were then told on Friday that we get an extra 3.5 MMcfd and 350 Bopd from an added zone. Let's be conservative and say that the flow rates stabilise at something like 11 MMcf and 1,000 Bopd per day. If we get these flow rates, we are talking about something like 5.5 times the gas flow rates and 7.5 times the oil flow rates achieved H2 2010. As a result, the $900k per year, can easily become $5.5 - 6m per year for Range from NCR, but MOST IMPORTANTLY can give to the operator Crest Resources, something like $20m a year.
Remember that the cost per well in NCR is something like $5m (page 10 below).
http://www.rangeresources.com.au/fileadmin/...ons/Oilbarrel_Final.pdf
This means that Crest needs to fork out circa $4m per drill and with a net income for them from NCR around $3.5-4m per year, this was a bit challenging till now. Their financial constraints is probably the reason why they agreed to give us an extra 8.19% in ECV for just $148,00. The sooner ECV gets into production, the faster they can get income coming in from an asset that was just sitting in their books till the horizontal well was finally drilled this year.
So, with the improved flow rates and the extra money coming in for Crest, we can now hopefully get into this 3-4 wells per year program that PL was talking about last August. More wells in NCR means more income for Range to use to cover it's fixed admin expenses and stuff, more reserves can be moved from P3 to P2 and P1 and as a result further underpin our current ridiculously low sp.
Throw in there a few drills for hundreds of millions of barrels (attributable to the company) that we are going for in the following 6 months (starting from Georgia in 2-3 weeks' time) and Range looks a half-decent investment to me.
What do you think? By Houfterman --------------------------------------------------
11:30 29/05/2011 failure is not an option Success IS VIRTUALLY GUARANTEED...their last update on 27th May, suggests however they apply 'fracking' the well dry or not dry- suddenly springs to life with much more volumes of oil/gas than was previously thought possible!
This revolutionary 'hydraulic shale fracturing' is proving to be a complete success every time it is used. It makes sense to me. Imagine, when an explosion occurs deep into the drilled well, the whole sub-stata becomes fractured and any gas trapped in pockets forces its way under huge pressure into the only 'escape route' available...the drill hole! This in turn would enable oil to be extracted/pumped easier under its own pressure. In the last update yesterday....Peter Landau is trying to tell us something?
However the markets and investors are too slow to respond to this 'earth shattering news' (pun intended)! When they do, AND begin to realise the significance of the 'hydraulic fracking system'...and how it will greatly increase the recovery of both oil and gas volumes...Puntland Georgia and Trinidad could then become targets for further increased gas/oil volumes much higher than previously estimated.
Failure is not an option, and I'll let you into a little secret that only a few insiders KNOW, plus about every oil/gas expert on the planet.
A friend of a friend put this into my ear recently (she works for a very well known gas Co.)...there are 'plans' for thousands of ABANDONED oil/gas WELLS worldwide to be re-assessed and re-worked for possible extraction of the trillions of cu/ft of gas and literally millions of barrels of oil that is believed to have been present, but missed due to unfavourable drilling conditions! But for the 'introduction' of hydraulic shale fracking, this was never going to be an option....a well abandoned, is still there, plugged and capped, ready for hydraulic fracking and suctioning, in vast oil/gas volumes from areas in the surrounding encatchments. A prospect akin to the re-working of old mine **** heaps, different process but the principle is the same.
Range resources are not the first to use this fracking technique, those that are, have all reported 'significant oil/gas' increase in volumes!
http://www.rangeresources.com.au/fileadmin/...mpany_Update_270511.pdf
. By dickie3times -------------------------------------------------- 11:02 29/05/2011 North Chapman Ranch Background The North Chapman Ranch project area encompasses approximately 1,680 acres in one of the most prolific oil and gas producing trends in the state of Texas.
The North Chapman Ranch is situated within the prolific Frio producing trend just north of the Chapman Ranch in the Mobil David and Doughty Fields. The Mobil David field was discovered in 1965 when Mobil drilled the Chapman #1B well and completed the well in the Laureles Sand (now the Howell Hight). To date, an estimated 250 billion cubic feet of natural gas and more than 10 million barrels of oil have been produced from this field, primarily from the Anderson sandstone. Recently, several operators in the area have been successfully developing the deeper Howell Hight formation with some wells exhibiting flow rates in the 6-9 million cubic feet per day range.
Statement, issued by 'US, House of Representatives' First Committee on Energy and Commerce (this link is very relevant to this discussion)
http://www.scribd.com/doc/53259585/Hydraulic-Fracturing-Report-4-18-11 ============================================ Putting to one side all the other operations and jv's...The North Chapman Ranch ops seem to be less read or studied, yet imho here we have the POTENTIAL of a huge GAS DISCOVERY that could set the trend for the sp to break out to levels never yet anticipated for GAS! GAS, just might be the 'icing on the cake, significantly before any 'BIG OIL'finds are proven.... ....I never invested in Range for their GAS potential, mainly for the HUGE prospects in Georgia (which still stands, and Georgia is always on my mind)....but now I believe, as 2011 moves towards Q3- Q4, I believe By dickie3times |