Reference : PR on February 12, 2007 - 11:14 AM EST
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Well Renewal to Purchase Lease Package in Northeastern Oklahoma
TULSA, Okla., Feb. 12, 2007 (PRIME NEWSWIRE) -- Well Renewal, Inc. (Pink Sheets:WRNW) has negotiated the purchase of a 785-acre lease package. The lease package is located in Rogers County in northeast Oklahoma. Numerous wells were drilled on the prospect acreage between 1960 and 1985. Production from the leases reached maximum levels of 4,000 barrels of oil per month during the 1980s. The wells were temporarily abandoned during the oil price collapse of the mid-1980s and the lease was abandoned by the operator. The Bartlesville sand was the producing horizon of the wells contained in the lease package.
Well Renewal expects production to be re-established in the wells contained on the 785 lease package after an extensive workover program currently planned for the leases within the next 60 days. Well Renewal will utilize the services of Pro-Formance Oil Field Services, LLC, a wholly owned subsidiary of Well Renewal. Pro-Formance will supply a workover rig to re-enter all of the wells located on the lease package to restore the wells to a producing status.
Will Gray, CEO of Well Renewal, stated, "We are extremely excited and energized with our newest opportunity to accumulate acreage within our operating region. This lease package has produced significant quantities of oil in the past and would still be producing today except for the collapse of oil prices during the mid-1980s, which caused numerous wells in our operating region to be abandoned. In addition to the wells to be re-entered and production re-established, our geological and engineering staff has identified 30 additional drilling locations on this lease package. We anticipate including these new locations in our 2007 drilling and completion budget. We anticipate production levels in excess of 3,000 barrels of oil per month from this lease package this year. Successful completion of the drilling and production of these new wells will add greater than $2,000,000 to the revenues and cash flows for Well Renewal during 2007."
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Now the MATH...
Lets Say: 4000 BBL per month
= 134 BBL per day
= 1.12 BBL per well per day based on 119 wells.
Now we take the current price of sour which is the worse posible product that could be recovered which is currently $51 a barrel. Now we subtract the known average per barrel cost of $21 from $51.
$51.00 - $21 = $30
Now we have our profit margin per barrel. We can now take our known daily production of 134 barrels multiplied by $30
134 X $30 = $4020.00 per day in profit.
365 X $4020.00 = $14,67,300 per year in profit.
$1.46M / 1 Billion A/S = .0015 EPS X 10 = 0.015 PPS
If that's the case then calculation comes around 0.015PPS. That is what it was trading at few days back.
Any idea? Will it ever hit 0.02 mark? Looks like its doubtful!!!
AI
