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Here's something that will make you laugh out loud:
I found this Crude Energy reference in my notes:
Sometimes, I simply take BECC's word:
Looking over my Breitling information I found a reference to a well spud by Breitling Oil and Gas called the Breitling-Turner No. 1 in Hardeman Co., Texas. The reference was dated March 9, 2011 and it was the webpage was http://www.ugcenter.com/.
There is no longer a reference to Breitling on the site.
As one might expect, there are no Breitling wells in that county, but the only Turner No. 1 well spud later than 2002 is the Enexco well. That well was completed in the Holmes Sand and produced nearly 200 bbls before dropping below the economic limit. In all, Enexco drilled four Turner wells that have recovered 75 mbbl. That's 19 mbbl per well in five years generating perhaps $1.5 million. Enexco chose not to drill the Turner 5 or 6.
It doesn’t mean that you can assume that Faulkner sold $8M in royalty interests
I would suggest that I can make that assumption, but I didn't.
Can you tell me how many royalty interest percentages were sold on any given prospect?
Yes, but it is immaterial to anything I said and, therefore, not worth looking up.
how you can pretend to know the amount of capital raised through private equity funding?
I can pretend to know, but I never did. I simply explored the implications of a statement by a poster. I often do that with your posts.
FM "never claimed to be an oil and gas expert" II
half truths and false assumptions
I have seen that phrase on several boards on different subjects. Usually comes out when the poster is desperate. Proof is virtually never offered.
That hardly qualifies as a “report.”
One of the problems I have is that you use words differently than most everyone else. It was by definition a report.
http://www.dictionary.com/browse/report
I am sure I labeled a lot of things as assumptions and I intentionally pointed out it was one report so people would know it was unsubstantiated. Sure it is speculative. Not much else to talk about since BECC went silent.
From what I have seen in publicly available information regarding direct investment opportunities, a stakeholder is buying into a royalty interest percentage in the overall prospect, rather than a single well.
Please provide backup for that. Everything I have read on their early webpages contradicts that. Even the tax "advantages" they tout would not apply under that deal. Oh, that's right, you don't back things up. You are not interested in doing that. You don't answer questions because that would require you having a basis for what you say. Half-truths and false assumptions are better, aren't they?
It is that whole “growth through the drill bit” that Faulkner keeps talking about.
Please alert me if that ever happens, even a small amount.
Basically, but I would assume BECC is carried to the tanks, then in for operating costs. In other words, they are getting 25% of the well without paying for any drilling and completion. Otherwise, they would have said 25% override, but they don't always use terms in the normal way.
Also, I am not sure which shareholders you mean. Direct investors pay Breitling's way. The carried interest would generate income for BECC if the well ever established a positive cashflow. That would benefit BECC shareholders if BECC ever made a profit.
According to one report, BECC is selling 1% interests in a $3.5 million well for $80,000. You might think direct investors are paying $8 million a well, but BECC is carried for 25%. That means investors are paying $10.7 million per well. BECC gets $3.6 million a year in administrative fees to administer who knows what, but Patriot has only pushed a handful of wells and they have been basically the same ones for a year or so. A barn-burner will hardly make any money for the direct investors at any reasonable price under those terms.
My theory is that sort of promote on wells is not sustainable. It works for a short time during the excessive exuberance of a price spike, but fails when prices are dropping or low. While not a Ponzi scheme, it requires the same sort of expanding number of virgin investors and those are only available during the feeding frenzy of a boom.
While there is no evidence of what BECC's finances might be like, except, of course, the mounting judgments against the company, I strongly suspect Patriot is not able to make its obligation to BECC. In a word, it's over.
All those divisions really muddy the water. I think I remember Texaco issuing a press release saying, "Holy Smokes, this is complicated, we will get back to you real soon." A company like BECC with three divisions and ones of employees is certain to have trouble.
The Seely Oil-Hankamer No. 1, 4235130907, was completed in January 2015. A fairly respectable 4 point test was filed. No production has ever been reported in the intervening year+. Last comment on the PI card is that they are waiting on stock tanks. That was in April 2015. It is possible that they were unable to find a gas purchaser. There is gas production in the area, but there may not be a gathering line close enough to warrant hooking up the well. Who knows? However, CF would have known the situation with the Hankamer at the time he wrote his now famous letter to loyal investors.
I hate to be a nattering nabob of negativity, but I am starting to lose confidence in what CF says:
"Because of the extent of the 2013 re-audit combined with the complexity of our three operating divisions, the initial audit timeframe (sic) exceeded expectations thus delaying our 2014 financial statements. Management, our auditors and our financial statement consulting firm are working diligently to complete both audits and the Form 10-K as soon as practical."
"The Sellers '66' #1 well was spud in March, reaching a depth of approximately 8,600 feet and is on target for fracturing operations in the next 30 days, again on a no debt basis which is critically important in this environment."
"The Company participated in the Cole #1 well, which reached total depth in May hitting all targeted Permian zones. Fracking and completion proceedings are expected in the next 60 days."
"The Hankamer #1, in which the Company owns a non-operated working interest, was completed in Newton County, Texas in an established area known to management. The vertical well encountered two expected pay zones in the Norian Yegua field."
Don't worry mackfish,
I am sure BECC will squeeze off, re-enter, deepen and kick-off the Hoppe as soon as it depletes. That's probably what the extra 4.5 MM$ is for. That would double the number of horizontal wells they have drilled.
No ultimatum. But if I cannot narrow down the nature of your misconceptions, I have to type too much. You know that post you pinned at the top of this board containing nonsense sprinkled with incorrect statements about well depth? Follow that thread and you will find my questions.
Reaper,
There is a lot you don't understand. I can answer your questions with two sentences. Because he didn't think it was worth it. I only expressed a reserve opinion on producing wells. No more questions until you answer mine unless it is interesting.
Just to pull things back on subject, the problem with BECC drilling bad areas and hyping bad wells is that disillusioned direct investors are created. Completely new direct investors must be found and that takes money. It takes PR firms who are paid. It takes media outlets that are paid-up. It takes industry magazines who expect to be paid.
Now, BECC can form up an indefinite number of corporations so that its name and Chris Faulkner's name are not associated with the "retail" operations. Investors who fail to research the connection are just what BECC is looking for. So Patriot Energy and as many reincarnations as needed can continue to find virgin investors, but regardless of name, oil finding talent is needed for the exponential growth needed to justify even the current stock price. I have seen many companies like BECC and actually tried to name some on this forum, but was deleted. My guess is that CF and his friends will not make it to the next price cycle.
The above is my opinion and admittedly, I am still bumfuzzled that CF achieved the credibility he used to have, so take my opinion for what it is worth, but remember I have been right about all things that matter. The only mistake I have made on this board is that one time I thought I was wrong (old joke, I know, but it is basically correct).
I am sure that there are traders who have made money and lost money on BECC. As far as I am concerned, traders in these effectively defunct penny stocks are in a high risk business and they know it and they can take their chances. I have no problem with that. I do have a problem with CF as a representative of the energy business. I think it was a mistake to give him a pass because he was promoting fracking. When he is discredited, everything he has said will be discredited. A lot of what he said was correct. He is relieving money from the uninformed and perhaps momentarily careless. I don't like that. It is embarrassing to the industry and makes it harder for legitimate oil companies to operate. It also invites costly regulation.
For those of you who like high risk trade, buy or short or whatever you do. Heck, BECC might be the target of a reverse merger.
And by the way, this information comes from the driller and from the logger. These are the original sources that CW would use to determin the depth of the well. I just can't resist:
I've got your answer right here. I did bother to look it up. Did you?
I did bother to look it up. Here is a summary of what I found. There are still three questions out there, but those are problematic, I suppose.
None of what I said conflicts with CW assuming that TRRC reported it accurately.
Some posts shouldn't be taken seriously.
You are right. We are are total agreement on that one. Your recent comments about my posts are nonsense and when I asked you some simple questions, suddenly the subject is changed.
It is much easier to talk about mythical anti-frack bloggers than deal with reality, I suppose. Care to back up what you said?
Reaper confusing permit depth for well depth (TD) is the more likely explanation.
ROFL, reaper.
9000' is the permit depth, not the depth the well was drilled to. The well was drilled to 6900'. Is this perhaps out of you depth?
http://webapps2.rrc.state.tx.us/EWA/leaseDetailAction.do?selTab=1&methodToCall=displayLeaseDetail&rrcActionMan=H4sIAAAAAAAAAMWTS4vbMBDHP417MRhp5Cj2YQ5q1i2BrJMqoSGEPWhjkRU4sZEc2gV_-EruI6-WhR7aizXzn4dGP0s9JQRZTwlFeGftTuw60xzlzlZb8oSD_kU_q7Z1kPhw4jrV6aT7mpxcxERGfAZgBB-KtfAmC2ZlTV2b436h7cF07tNJ29fvbZOq8UkpHnT30lSrZqLq2gsjtLo72eOqWWpldy9eypDcTbN1Q1TYvUtaZdXhs6pPehjS90wZDcYIn_XeHN3adKEPGWMOKYc02Nl1jMKNf1l7szv9dyzcTwYcW7XX9uKsvwVDn7a3eWFYpD0gJT1DyvoUST9C6LlX7sv_I1f4S661Vk4_6E6Z-g2clXFtrV5n54I_o6V3020vNgrSLSBKAiDGgEPwGLI85QEK9e_Jo_nlAi6ElOJxLos4AuDcf4Lu_0wWGAKq1pThDP49jmkenqTnkpKcX4dpfibvycZ8TOM42BznYcnOYSC4ns5mU_G4jGAST2Zis5qXcVEW8uMmKNNykoQ8igEsAGYjyAgjA3F25aW4XEjxvpBy4-fPVrIoH2IhCxFBfk_tjQv54z7S4T5-A7Nz8jaCBAAA
My apologies, I was making a joke because the first well, the 671, is the shallowest. Wouldn't be funny to people who, rightly, didn't bother to look that up. Still waiting for reaper's answers.
I'm trying to figure out how the 671 is deeper than the 672. mackfish, if you can help me with that, please do.
Reaper,
I am going to make this brief so as to not distract you from the backlog of questions I asked you and you haven't answered.
I didn't think it was important. There are a lot of things I didn't mention about these wells.
I have a question for you. How is hole beneath the producing interval important?
If you answer that question, I will go into more detail.
Oh, just three more questions. How does rathole relate to ROI calculations? In the case of the CW wells, their production is historical fact for the most part. As far as the Hoppe, how is the fact that CW drilled to 8200 feet but completed above 6808 relevant to the Hoppe ROI?
When you discussed the CW Parramore lease being good, why did you leave out that there are three wells on it. Seems that would be relevant to economics?
Yep. Once you have a model of future production, you can test sensitivity. I ran the model from when the Hoppe was drilled. It takes $350 per bbl oil to pay out a 3.5 MM$ well like the Hoppe. It pays out in 12 years. So if you get a modest $300 price increase for oil, you may get your money back on a future well like the Hoppe. If an investor buys into the well for $8 million gross, a modest $600 a bbl increase will get his money back in 21 years with zero percent IRR.
OK, let's look at reserves. If a well like the Hoppe, given $100 oil, declines not a bit from the Hoppe current rate of 10 BOPD, You will get your $8 million back in 33 years. But....within 100 years of well life profits will be $47 million dollars. That's an IRR of 3%. Better than a bank savings account, I suppose...if you ignore the risk.
I have to go by memory, but I was reading the terms of a drilling fund in the eighties. The terms were something like 100% to casing point for 90% of a well and if the well paid out the fund manager backed in for a 40% WI for free. There were management fees, of course. I assumed it was legal since it was all spelled out, but it would take a layman to think an investor could make money. I assume it was legal since it was all spelled out, but basically an investor paid for the well and the manager got any profit. According to OPC, Breitling didn't spell out anything, which I have always suspected, but do not know first hand.
The sheriff has been ordered to seize $92,000 in BECC assets. I wonder how that is going? However, my theory is that BECC cannot raise more money without a phone bank and office space so that is part of my end-game model. As far as their operated wells, as soon as a rod parts and there is no money to fix it, that will be the end of the well.
I guess someone in Dallas could walk by their office and see if there is any furniture. At the very least, I would think they would keep the door locked and dive under any remaining desk every time the elevator bell dings.
Most investors understand why an amateur co loses its BOD and outside auditors.
I am just hoping direct investors do a little internet searching. Maybe check out the SEC site. I certainly understand why Breitling sells prospects under a different name.
BTW, I adjusted my projection of future revenue for the Hoppe well based on additional production data. I assumed that WTI will modestly increase to $100 a barrel in June. Under that scenario, the well pays out nearly 10% of its cost.
Some still don’t know when or where Breitling was originally formed, or how long they have been a public company.
Well that wouldn't be me. I have always known that CF was involved in an Oklahoma corporation with Breitling in its name going back to 2004. I also looked up when the corporation that is now BECC was chartered. Definitional thing which actually is supportable by SEC filings. Type in Breitling Energy and look how far back the filings go on the SEC website. I also know when Breitling Oil and gas was chartered in Texas and, additionally, I noticed when BECC started its push to be noticed publicly. It's all in the internet archive. I also knew in December 2013 when Bering bought Breitling's assets with stock.
Basic research into Sterling County, that includes the CWEI parramore 66, only goes to show that a combination of underperforming offsets from the original well, combined with almost two years of unfavorable $WTIC prices jeopardize the overall profitability for Clayton Williams.
I don't know what you are saying here. No well operated by CW was profitable, as in paid out, to 100% interest in Sterling County during some of the best oil prices ever. You have already said that RRC production data is useless. You are wrong about that and I really don't know where you got that idea. BTW, new production figures are out for BECC wells in Sterling County showing continued decline. I know you think they might jump up to 200 BOPD, but it just ain't so. What was the term for what you are doing? Oh yeah, grasping at straws.
It does not mean that wells currently being developed, with newer technologies and enhanced recovery methods, will yield those same results for Breitling’s direct investors in Sterling County.
One of the differences between you and me is that I know what new technologies are out there and what has changed over the past couple of years. I also know the state of EOR in the area. But it is a straw to grasp at. You are sounding like CF here, vague references to technology that other companies might use on other wells.
In fact, a modest recovery in $WTIC prices could yield nice returns for Breitling’s JV and JI partners.
Do you have a basis for that statement? Now we are in the virtual straw area.
All the talk about "painting the tape" is not interesting to me and I was never involved with that, but if you want to discuss oil well economics, I am quite interested in doing that.
jpo33,
I cannot fathom why these message boards for BECC are so active. If you all are really investors in BECC, you too are fools like me.
Well, as I have stated, I am here because CF is so completely arrogant and obnoxious that he is an embarrassment. I have never made a secret of that fact. There is nothing unique about CF, he is just a visible target.
In my opinion, this has been a months long flame war with reaper the chief troll. I would have lost interest except for my hope that some of the facts I present about BECC show up on Google.
I really don't care if anyone believes me. For example, if I told you the well you bought into at 8 MM$ should cost 3.5 MM$, all in, you might have done some checking. There would be no need to take my word for it.
I am sorry for your loss. My purpose is to give people a heads up. Also, every time someone says I am wrong when I'm not, I tend to respond. Kind of a hobby, if you like.
I didn't ignore it.
The only gotcha part of my original question was to gauge your experience in direct investing in oil and gas. If you haven't done that, there is, of course, no shame. In fact, as I said before, I do not recommend it.
Actually, since there are no regulations of investing in oil wells other than the usual prohibitions of fraud and such, you, reaper, can invest directly in oil and gas wells. In fact, you can get together with 10 or so of your friends, lease some land, contract with a drilling company and there you go. Several months ago, I understood the "qualified investor" thing and my memory is that it has to do with marketing. I am sure you understand it better than I.
Now, that is a short discussion, there are all kinds of regulations on the actual drilling, but not much in the raising money leg. I have actually watched the process take place many times. An individual picks an unleased tract of land, thinks up a justification for drilling, goes to the Petroleum Club and talks to laymen about the prospect, gathers investors and drills a well. The pitfall is that the investor needs to have the technical expertise to evaluate the "reason" for drilling and the risk involved and also how the "promote" affects risked rate of return. Because of this, a wealthy doctor who is impressed by the cashet of the oil business, is a juicy target for a promoter.
A good oil finder will function in the same way, so if one knows someone who is trustworthy, then it can work out. A layman still doesn't have the tools to evaluate risk on his own, though.
Here is a true story, though shortened. I was standing in the office of an individual who had gotten into the oil business less than a year prior. He was explaining a prospect using a map on his wall. He said, "See these two wells? They are completed in sand bars in a river bed. We know that these bars tend to occur at regular intervals, so we think one is under our lease." I said, "You show the channel meandering over to your lease. How do you know it does go over here?" He said, "Well, our lease is over here. This was the only available lease." It is amazing the influence on 150 million year old river beds that an available lease can have. I am sure he sold the prospect. He had sold others.
In the case of BECC, the company's growth in their working interest drilling ventures is closely tied to their ability to find oil or to evaluate other people's prospects. I believe that if they don't have that ability, they will eventually run out of direct investors. When that will happen is unknown and I certainly never said they lost money on any well--how would I know?
One of the problems that a lot of investors in oil wells and small oil companies have is success bias. Among a group of monkeys picking well locations, some might hit pay. Among a group of monkeys, each picking many locations, a good fraction of the group might hit pay. People remember he instant millionaires and forget the dry holes.
If CF manages to stay in the industry, he is may well pick a location that pays out.
I wasn't giving stock trading advice. Your post is your opinion coupled with something about BECC's business model. It really doesn't have anything to do with anything. But you are right about one thing, I should have said oil and gas wells because some people would not have gathered I was talking about direct investing from the subject of the thread. My bad.
Have you done any direct investing in oil and gas wells, reaper?
reaper,
The guy just said CF didn't make money off the value of stock. Then you respond by running on about a stock promotion. I am confused.
Chris Faulkner pays himself a salary. I am not going to go back an check because it is so ancient news, as in over a year old, but I seem to remember it was a few thousand dollars worth of stock over a short time in March 2015. Again there might have been a trade or two here and there elsewhere, again, no need to look up this ancient history.
Please explain why Faulkner has been shown to be buying shares of his company on the open market, when the idiot bloggers claimed he was selling."
I have no idea why CF bought a few shares in his company when he owned millions of shares. I have no reason to think he sold any. I have no idea what the above quotation has to do with what peterpan said.
jpo33,
For some time now, I have been discussing my belief that BECC has exaggerated its expertise and the extent of its experience in the industry. I have tried to keep my posts based firmly on fact including demonstrating the unusual lack of information. Information from direct investors has been extremely limited.
Without providing any information that is proprietary or subject to confidentiality, could you send me information on your experiences? A description of your experiences with them, any promotional material that they sent you, an overview of how you came to invest with them, any estimates of recovery, that sort of thing. Information that you received after agreeing to participate or after signing a confidentiality agreement or anything that they said was confidential SHOULD NOT be revealed.
If you wish to contact me by email, please send it to BreitlingEnergyNews@outlook.com.
You said you were foolish. I suspect maybe not. I have said for over 30 years that laymen should not invest in oil and gas. Investing in Exxon or Chevron is OK, otherwise one's chances of getting skinned are far too high.
I have met oilmen who styled deals so that they actually made less money than outside investors. If you are close friends of someone like that, go for it. Otherwise, stay away.
During the eighties, small drilling funds were popular because people wanted to get into the booming oil business. I saw terms of drilling funds that guaranteed the investor would lose money and they were perfectly legal!
Just so everyone knows (mackfish), I think I was optimistic on the expenses and well costs on the Parramore wells. For this discussion, it is the way I wanted to do it. Some might have noticed that I didn't charge severance tax in the early years. That was an error. My severance tax provision didn't go back to 2009. I didn't see a need to correct the error, since the leases were still not going to payout and it was of a small magnitude.
As far as lost interest on the money invested, that is taken into account in the present worth @ 8 percent. This is called discounting and takes into account that money invested in the lease is not invested elsewhere. I think that is generally beyond the scope. My main point is that the CW wells were bad.
Here is a plot of the production from the Parramore lease. I wish I could say I knew why the later wells seem poorer than the first, but I don't know. I could speculate that they drilled the best location first or that depletion from offsets was a factor, but that is just speculation. Notice that the gas-oil-ratio is going up with the later wells. That, with other info I don't have, might mean something.
One thing I can see is that there is a pattern of behavior to the wells. Now, if I look at 20 or thirty wells and they behave similarly, I can infer that the future wells might behave similarly. Would I be certain? No, but more so if we are talking about a group of wells rather than one. I can, however, assume that the Parramore lease was not curtailed during the some of the highest oil prices ever and yet the lease lost money overall. (yes, I am still aware of the $140 spike.)
This helps us understand how BECC wells might perform and why CW might farmout the acreage. That being said, the certainty is somewhere above no clue and somewhere below absolute.
OK posts seem to be disappearing and coming back. Anyway, I essentially did post all the prices. The 4/2009 to 2/2016 shows spot minus $3. On the second strip I only showed the part, the first year or so, that wasn't bouncing between $80 and $100, because I didn't see the need to repost the whole strip. I didn't mean to confuse of mislead and I am sorry if I did. As I said, the weighted average of the prices I used was about $79 which translates to a Cushing spot equivalent of $82. You can see the prices I used on the revenue calculation, the annual average anyway.
We are talking about the CWEI Parramore because you claimed Breitling’s position in Sterling County isn’t viable and I don’t understand how your excel spreadsheet provides any verifiable proof of your claims.
Actually, I said that their two wells they have put on production are sorry. I have no idea what Breitling's position is. I also said that the behavior of nearby wells informed my guess about future production from the Breitling wells. I am not nit picking, I know what you meant, I just want other people to know I have been talking about BECC history of finding oil and not whether the wells are profitable to Breitling. They may well be.
Since 2009, the CWEI Parramore has produced around 70,000bbls and continues to produce. It will likely continue to produce for several years before it is depleted and final tallies are able to be calculated on the success or failure.
Yes, that is true, except for the years of future production being likely. There are three wells on that lease. The lease has made 23,000 bbls per well. Total cost of the three wells to recover 70 Mbb is optimistically 6 million dollars. That's $86 a bbl in well cost. There is no room for taxes, royalty, and well operating costs. This is a short method of seeing that the wells did not payout, but I calculated it rigorously by taking each month's production for each well and multiplying that production by that month's oil and gas price. I then deducted taxes and royalties and operating expenses, generating a monthly cash flow. Individual well production is not reported to the state, so I used IHS Energy allocated figures for well production. The IHS figures balance back to lease monthly production so any inaccuracy is of little economic consequence.
Here are the prices I used, which are Cushing spot (as reported by EIA) minus 3 dollars differential to adjust to wellhead. Basically same method for gas price, I believe $0.25 differential from Henry Hub spot. Wasn't more than minus $0.30.
Date Oil Gas
01/2009 38.71 4.99
02/2009 36.09 4.27
03/2009 44.94 3.71
04/2009 46.65 3.25
05/2009 56.03 3.58
06/2009 66.64 3.55
07/2009 61.15 3.13
08/2009 68.05 2.89
09/2009 66.41 2.74
10/2009 72.72 3.76
11/2009 74.99 3.41
12/2009 71.47 5.1
01/2010 75.33 5.58
02/2010 73.39 5.07
03/2010 78.2 4.04
04/2010 81.29 3.78
05/2010 70.74 3.89
06/2010 72.34 4.55
07/2010 73.32 4.38
08/2010 73.6 4.07
09/2010 72.24 3.64
10/2010 78.89 3.18
11/2010 81.25 3.46
12/2010 86.15 4
01/2011 86.17 4.24
02/2011 85.58 3.84
03/2011 99.86 3.72
04/2011 106.53 3.99
05/2011 97.9 4.06
06/2011 93.26 4.29
07/2011 94.3 4.17
08/2011 83.33 3.81
09/2011 82.52 3.65
10/2011 83.32 3.32
11/2011 94.16 2.99
12/2011 95.56 2.92
01/2012 97.27 2.42
02/2012 99.2 2.26
03/2012 103.16 1.92
04/2012 100.32 1.7
05/2012 91.66 2.18
06/2012 79.3 2.21
07/2012 84.9 2.7
08/2012 91.13 2.59
09/2012 91.51 2.6
10/2012 86.49 3.07
11/2012 83.53 3.29
12/2012 84.86 3.09
01/2013 91.76 3.08
02/2013 92.31 3.08
03/2013 89.94 3.56
04/2013 89.02 3.92
05/2013 91.51 3.79
06/2013 92.77 3.58
07/2013 101.67 3.37
08/2013 103.57 3.18
09/2013 103.29 3.37
10/2013 97.54 3.43
11/2013 90.86 3.39
12/2013 94.63 3.99
01/2014 91.62 4.46
02/2014 97.82 5.75
03/2014 97.8 4.65
04/2014 99.07 4.41
05/2014 99.18 4.33
06/2014 102.79 4.34
07/2014 100.59 3.8
08/2014 93.54 3.66
09/2014 90.21 3.67
10/2014 81.4 3.53
11/2014 72.79 3.87
12/2014 56.29 3.23
01/2015 44.22 2.74
02/2015 47.58 2.62
03/2015 44.82 2.58
04/2015 51.45 2.36
05/2015 56.27 2.6
06/2015 56.82 2.53
07/2015 47.9 2.59
08/2015 39.87 2.52
09/2015 42.48 2.41
10/2015 43.22 2.09
11/2015 39.44 1.84
12/2015 34.19 1.68
01/2016 28.68 2.03
02/2016 27.32 1.74
For the next 12 months, I used the 02/2016 prices. Then I used $35 and $1.75. Doesn't really about the future prices because the three wells are not commercial. I assumed a royalty burden of 20%.
Wells being brought online more recently seem to be far more efficient than wells drilled in 2009 and 2010
Efficient in what way? There is generally a correlation between sand volume and production rate. It's significant, but not earth shaking (sorry). More sand means more cost. Give me an example of a far more efficient well and I will look into it.
From the time the CWEI Parrramore went into production, up until 2014, $WTIC bounced primarily between $80 and $100.
I'm not seeing that, but the weighted average of the prices I used was 79.46. Adding back the differential it is $82.46
Spot prices from EIA
Apr-2009 49.65
May-2009 59.03
Jun-2009 69.64
Jul-2009 64.15
Aug-2009 71.05
Sep-2009 69.41
Oct-2009 75.72
Nov-2009 77.99
Dec-2009 74.47
Jan-2010 78.33
Feb-2010 76.39
Mar-2010 81.2
Apr-2010 84.29
May-2010 73.74
Jun-2010 75.34
Jul-2010 76.32
Aug-2010 76.6
We are talking about the CWEI Parramore because you claimed Breitling’s position in Sterling County isn’t viable and I don’t understand how your excel spreadsheet provides any verifiable proof of your claims.
You are holding me to a pretty high standard. Don't really care if anyone believes me. Anyone is welcome to do the same calculation and prove or disprove mine. But here you go:
:
If you want individual well numbers, fire up Excel.
For whatever it is worth, Breitling's Attorney in Status Luxury LLC v. Breitling Oil & Gas Corp. et al has filed for withdrawal due to Breitling Energy's failure to pay him. This occurred around February 9, 2016 and was requested effective March 1.
Reaper, here are the economic indicators on the Parramore Lease. It has not paid out and since it is non-commercial now, it is unlikely to. The Parramore is the best lease among the CW operated wells in Sterling and Glasscock Counties. Feel free to post your own numbers and we can hash out the differences. The effective date of these indicators is 4/1/2009, the month the first well went online. This is used only for discounting, so is not particularly important in this case.
Earlier, you asked about the other factors that go into my production guess for the Hoppe. This lease and others are helpful in determining how the Hoppe will behave. This is only a small factor, initial potential test for the Hoppe was considered. Again, no uncertainty on how the Parramore wells behave and will behave, lots on the Hoppe, but less and less as time goes by.
Why are we discussing the Parramore? Primarily because you brought it up but also because it tells us we need an unprecedentedly high oil and gas price, plus performance better than almost all similar nearby wells in order for the investors in the BECC wells on the farmout to make any money. No company can predict future oil prices, but when things look bleak at historical peak prices, it is not a good sign.