Replies to post #28525 on Xun Energy, Inc. (fka XNRG)

[michaeldesanta]

CONFIRMED: Ergon purchases oil at market price

Straight from SEC filings:



Ergon Refinery purchases all the oil produced at market

At the Rice lease, that means $104.48 (current) per barrel at current prices. With an estimated 25,353 barrels per well @ $104, we're talking $2.6 million @ 82.5% royalty, which comes to $2.175 million per well. 10 year production estimate is 6,340 barrels per well based on nearby production. That's $659K @ 82.5%, which is $543K per well for the first 10 years. The other four wells that Vencedor drilled at Rice a couple years ago produced 1388 barrels the first month, or about $144K @ 82.5%, which sums up to $119K the first month at current prices.

So given past drilling results... I'm expecting Rice #15 to output something like ~350 barrels, so maybe $36K the first month.

[StockSurfer88]

Quote:
Subsequent years should see larger production as the wells generally increase oil output over time.

I don't know where you are getting your information, but that statement is not true. Wells generally decrease oil output over time.