Here are the estimates with Drake Gold and "NWPN" for the 146 wells to be reworked thought everyone needs to see the kind on revenue possible here.
The Now Corporation Evaluation of Lease with Drake Gold Resources Inc. dated 8 May 2013
For 146 wells on 559 acres referred to as the Rensma lease
Purpose: Evaluate the value and cost of lease
Source: Lease Agreement, production studies of other companies in area
Scope: Schedule results using the terms of the lease and the following assumptions
Lease Terms:
1. Company's net revenue interest (NRI) in lease is 87.5% of the gross production of 147 wells.
2. Company obligated to pay 50% of its NRI to seller until $130,783 is paid whereupon title for lease is passed to Company.
3. Company is obligated to invest the other 50% of its NRI into the rework of wells until all are reworked.
4. Company is obligated to pay seller 12.5% of its NRI for a period of three (3) years after the original $130,783 is paid.
5. Company is obligated to rework a minimum of two (2) wells per month, weather permitting.
6. Seller will receive a pro-rated interest in wells based on the proportion of the seller's investment in rework.
Assumptions:
1. Estimated cost to rework a well is $10,000.
2. Company will rework twelve (12) well is 1st month of operations.
3. Each reworked well will product one (1) barrel (bbl) of oil per day.
4. Sales price of oil estimated at $80 per bbl.
5. Company will reinvest all available NRI into the rework of the wells.
6. No rework will take place in the months of December thru March
Conclusion:
1. The estimated total purchase cost of the lease is $1,272,002.
2. Total estimated cost of rework is $1,470,000
3. Total estimated revenue to Company until all lease obligations are paid (approximately 4 years) is $9,384,900
4. Estimated value of gross production until all lease obligations are paid is $10,725,600
5. Estimated gross production of lease when fully developed is $4,233,600 per year.
Total
Wells in Wells Well Net Rework Plan Revenue
Production Reworked Balance at Gross Revenue Cost of Lease Available Accum. to
Month for Month in Month Month End BOPM Revenue Interest Monthly Balance Lease Monthly Avail Investment Balance Company
(a) (b) (c) (d) (e) (f) (g) (h) (h1) (i) (j) (k) (l) (m)
Beginning Balance - - - - $- $- $- $130,783 $- $- $- $- $- $-
Oct-13 - 12 12 - - - - 130,783 - - - 120,000 - -
Nov-13 12 1 13 360 28,800 25,200 12,600 118,183 - 12,600 12,600 10,000 2,600 25,200
Dec-13 13 - 13 390 31,200 27,300 13,650 104,533 - 13,650 16,250 - 16,250 52,500
Jan-14 13 - 13 390 31,200 27,300 13,650 90,883 - 13,650 29,900 - 29,900 79,800
Feb-14 13 - 13 390 31,200 27,300 13,650 77,233 - 13,650 43,550 - 43,550 107,100
Mar-14 13 - 13 390 31,200 27,300 13,650 63,583 - 13,650 57,200 - 57,200 134,400
Apr-14 13 7 20 390 31,200 27,300 13,650 49,933 - 13,650 70,850 70,000 850 161,700
May-14 20 2 22 600 48,000 42,000 21,000 28,933 - 21,000 21,850 20,000 1,850 203,700
Jun-14 22 2 24 660 52,800 46,200 23,683 5,250 - 22,517 24,367 20,000 4,367 249,900
Jul-14 24 4 28 720 57,600 50,400 5,250 - 5,644 39,506 43,873 40,000 3,873 300,300
Aug-14 28 5 33 840 67,200 58,800 - 7,350 51,450 55,323 50,000 5,323 359,100
Sep-14 33 6 39 990 79,200 69,300 - 8,663 60,638 65,961 60,000 5,961 428,400
Oct-14 39 7 46 1,170 93,600 81,900 - 10,238 71,663 77,623 70,000 7,623 510,300
Nov-14 46 9 55 1,380 110,400 96,600 - 12,075 84,525 92,148 90,000 2,148 606,900
Dec-14 55 - 55 1,650 132,000 115,500 - 14,438 101,063 103,211 103,211 722,400
Jan-15 55 - 55 1,650 132,000 115,500 - 14,438 101,063 204,273 204,273 837,900
Feb-15 55 - 55 1,650 132,000 115,500 - 14,438 101,063 305,336 305,336 953,400
Mar-15 55 - 55 1,650 132,000 115,500 - 14,438 101,063 406,398 406,398 1,068,900
Apr-15 55 50 105 1,650 132,000 115,500 - 14,438 101,063 507,461 500,000 7,461 1,184,400
May-15 105 20 125 3,150 252,000 220,500 - 27,563 192,938 200,398 200,000 398 1,404,900
Jun-15 125 22 147 3,750 300,000 262,500 - 32,813 229,688 230,086 220,000 10,086 1,667,400
Jul-15 147 - 147 4,410 352,800 308,700 - 38,588 270,113 280,198 - 280,198 1,976,100
2nd year payments 4,233,600 3,704,400 - 463,050 3,241,350 3,521,548 3,521,548 5,680,500
3rd year payments 4,233,600 3,704,400 - 463,050 3,241,350 6,762,898 6,762,898 9,384,900
Total production of lease for period 28,230 $10,725,600
Company net revenue interest for period $9,384,900
130,783 1,141,219
Estimated cost for the purchase of the lease. $1,272,002
Total Investment in rework $1,470,000
Reference
(a) Number of wells in full production for the month.
(b) Number of wells reworked at $10,000 per well during the month. Initial 12 wells to be reworked using $120,000 raised by Company.
(c) Wells in production at month end. (Column (a) + (b))
(d) Number of barrels (bbl) of oil produced during a month (BOPM) at the rate of 1 bbl per well per day for 30 days. (column (a) x 30)
(e) Gross revenue of wells in production calculated at $80 per barrel. (Column (d) x $80)
(f) Company's net revenue interest of 87.5% of gross revenue. (Column (e) x 87.5%)
(g) Contractual percentage (50%) of Company's net revenue interest to apply to lease purchase price of $130,783. (Column (f) x 50%)
(h) Outstanding running balance of lease purchase price. (Column (h) - (g))
(h1) Company's obligation to pay 12.5% of its working interest to seller for three years after completion of $130,783 payout.
(i) Amount of monthly net revenue interest available for rework. (Net revenue interest less lease payments or (Column (f) - (g))
(j) Balance of net revenue interest available for rework. (Column (i) + previous month balance column (l))
(k) Investments into rework for the month at $10,000 per well.
(l) Balance of net revenue interest available for rework. (Column (i) - (k))
(m) Accumulated net revenue interest.
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