Daybreak Oil and Gas Inc (DBRM)

[Bobwins]

Month Gross Production Net Production
June 2014 9,074 Barrels 1,631 Barrels
July 2014 14,259 Barrels 2,754 Barrels

This is Kentucky from the last update. July 2014, which includes the wells you mentioned. Total net production is 2,754 barrels of oil. Divide by 31 days in July and you get 89 barrels per day NET.

Same calc for California shows 1310 net barrels divided by 31 days = 42 barrels per day.

Add the two together and you get 132 Net barrels per day. Read the PR again. It shows that even though the wells test at 300+ barrels per day, they deplete rapidly and are producing 20 or 30 barrels per day after a year. The more recent wells will take some time to get there but that's where they are headed. By then, the wells should be paid off but it just shows how tough it is to build production. There's no free lunch.

This is still a good situation. These are dirt cheap wells to drill compared to the Eagle Ford shale or Bakken. But they deplete fast and hard. So they need a drill rig to keep drilling so they can have several wells at all times that are producing at peak rates. Over time, they will build up a collection of paid for wells that will throw off a small amount of free cashflow each. This isn't a big company with a huge payroll so they don't need much to keep the lights on but this won't be a quick jackpot. I didn't realize the depletion rate was so high until this last PR.