That’s correct - I recall that when you did, when a firm was contracted with to get their company out there.
I remember Birdman. Wonder what that persons up too, LOL.
Petroleum Production has is only 30 BOE, which after over a decade, its sort of ok. But overall, it’s not big. Even 100 BOE after proposed merge, isn’t really much. Question is, who takes over Reabold leases in Mgmt and if daybreak is or isn’t- then there’s also the question of revenue splits. Does daybreak also assume Reabold debt or if the merger is actually consummated, is Reabold still their own company operating internally of daybreak?
There are so many grey areas here imo. Convoluted with no clear picture- yet. Plus there’s the question of ok, the $2.5 mill capital being raised - what are the terms? From whom? Is JW, going to be %100 in control of ALL decisions solely, with how that $2.5 mill will be used and implemented, and to which lease Reabold or Daybreaks?
Are they going to acquire and roll up on other leases?
IMO- I’d take that $2.5 and drill Reabolds, if their lease is higher in productions BOE regardless if they’ll decline faster than Daybreaks NE of bakersfield. The cash flow would be much much higher with reabolds lease, versus Daybreaks. Take some of that huge influx of new rev cash, write it down, but still take profits and drill maybe 1 lease in daybreaks. Sit on that, for a bit.
Then I’d take advantage of acquiring other leases geographically and propel BOE from 100, original combination at merge. If they drilled Reabold and somehow flowed 100+ BOE they just doubled production up to 200 BOE, for a couple of years- before declines show up. Then if they drilled Bakersfield, maybe 2 holes, and get maybe 2 BOE on average per well minimum, after initial higher flows - then we’ll see how this works out.
It’s obvious IMO, that reabolds leases likely have many more BOE daily. Cash cows.
You can go into texas and easily acquire 10 +!BOE for only $250,000. That’s 1/3 production of Bakersfield currently produces. So for $750,000 or even less, if one hunts around- in texas- on the cheap- you can equal the 30+!BOE of those kern leases and for a heck of a lot less capital. Millions less. Fraction. Less regulations in texas versus that crackpot newsoms California.
I think Imo- If was in the biz, I’d have rather over last 10+ amount of years invested into TX, LA, OK, MS and got more bang for the buck. CA is a pain the ess, far to many regs with hostile Govt to O & G. I think the gas plays out there are highly attractive with Henry hub spot prices, and natural gas becoming the go to fuel more and more. I’d diversify out of CA- in a blink of an eyelid. Keep ops in CA- but build BOE with local geo plays - but leverage out to other states.
I’d like to see diversification out of Bakersfield and higher BOE and systemic and organic growth BOE opportunities with acquisitions even past reabolds. If ones going to do it - DO IT. But there is a possibility IMO- if Reabold is drilled their could be 100+ BOE more and can end up with 200-300-400+ BOE production. It depends. We just don’t know. Reabold and daybreak likely knows.
But I ponder, that daybreak could double its BOE within 12 months maybe little longer depending if they can get permits for Reabold leases- that’s if they go that route.
Who knows what direction their going. Slow and steady with turtle Bakersfield or the running bunny rabbit with reabolds.
Me: I’d blow it OUT. Reabold all the way especially with $115 BOE. Drill baby drill. Take cash and acquire other geo plays- can always come back to the turtle Bakersfield BOE.
