Back of the envelope calculation, for what it's worth to the Gushers:
Average per acre drilling cost overages and operating expenses: ~$2,700
(based on equal holdings in 12, 13, and 23, September 2013-July 2014)
Average per acre revenues: ~$5,500 (based on equal holdings in 12 and 13 only, October-July). Note no revenues are included for 23 due to no DO's yet. But we are still billed for 23 expenses. That is unpleasant.
Note that per acre here means expenses or revenues divided by acres per section divided by number of sections.
So if I had 2 acres per section, that means I divided by 6 to get the expense number (that was summed over 3 sections) and 4 to get the revenue number (that was summed over only 2 sections). Some folks own different numbers of acres in various sections, so you need to sort out your estimated revenues based on your own holdings.
Note: early production in 12 and 13 has been more than 14 and 23, though all wells will likely improve significantly when submersible pumps are eventually replace by other types of pumps. Submersibles get eaten up by the frac sand. But I would discount the above revenue number by maybe 20-30% to estimate 14 and 23 revenues.
These numbers are practically meaningless, as they are averaged over 3 wells and will not give you any reliable expectation of production from a single well. This is just a very rough estimate. Do not make any major plans based on these estimates.
The ongoing operating expenses are much lower now than they were initially...only about $30 per acre for July. This number varies wildly from month to month, but lower is very good.
No numbers for 14 are included, as Devon won't release any information about 14 expenses and revenues until stipulations are filed.
Future production will be lower than initial production, but future expenses will be much lower, so your net revenue should stay at a decent amount for years, except when major reworks are done. You will be billed for your share of these. I would expect at least one major rework every 4-6 years per well. A refrac job can cost up to half of the initial drilling cost. The good news is that production should also increase, maybe up to initial levels or more. And then you won't have to wait for DO's, so you will get quick recover.
The average AFE drilling cost was $5,657 per acre across 12, 13 and 23. We paid an extra third to carry Superior. So it will take over 2 years to make up your initial investment based on current production and revenues. Increased production, lower costs, and higher prices will all decrease this time frame.
The long term view is not about monthly production numbers but total extractable product. Devon keeps improving their technologies to increase EURs. This works in our favor for a long ride.
