Replies to post #10495 on Supurva Healthcare Group Inc (SPRV)

[DeepBlue1]

3Saints was kind enough to send me this...

Posted by: 3Saints
In reply to: None Date:5/1/2007 8:10:33 AM
Post #of 10497

"Costs from an O&G filing >>> A typical well restoration we estimate will cost $2,500 to $5,000. WE have our own crews!!"

Don't know which company he got this from. I'm hoping it was WRNW. I think the 'avg' rework cost would be at least partially dependent on the geography/soil conditions etc of the particular area the wells were located in though.

[chuckchuckit]

Rework might be less since we have our own rigs and crew. Outside rework co's don't want to say much due to that is their business to make money.

I made some good money in UPDA last summer through fall (I would "never" buy that company now though). But back then when they were reworking a ton of wells they were doing about 2 per week per crew if I remember correctly. It went pretty fast and I don't recall them having any problems with not being able to rework any that they mentioned. They had 150 wells or so I think.

Chuck

[DeepBlue1]

If we could find an avg for the time it takes to rework an old well it would add a lot to the accuracy of some estimates also. We could estimate the time it would take to put all the wells they have into production.

I'm also hoping that the company has some method of doing a cost/benefit analysis for each well. Depending on the data they have access to from the original drillers pertaining to each well, they might know the depth, etc of each well...the original production parameters, quality of the oil it extracted, etc and come up with some sort of risk analysis.

Some wells may be determined not to be worth the 'risk' of reworking if it crossed their predetermined set of rules in the analysis.

I think an experienced TEAM would have this info to up their odds for maximizing their overall profit margins.

GLTAL

[xtrapink]

Charlatan--probably $3000 would be a good average price for a rework.

To address the flow question...remember that some of these wells were simply shut down because the 1980s prices did not make it economical to pump a couple BBL per day. Once sand and debris is removed and the pumps reactivated, these wells should have no issues other than routine servicing to produce at their normal levels for a very long time. This would apply to the majority of the wells, I believe.

Some wells might merit refrac and/or acid treatment to stimulate flow. The stimulated flows will last for weeks or even months before settling back to normal levels. Cost is higher, but the anticipated increased production on wells treated this way more than offsets the costs.

That's about as specific as I can get without knowing the specific condition of the wells that WRNW is dealing.

xtrapink

[DeepBlue1]

I think I found one of the answers I was looking for. Namely, the potential production life of these wells. And this is at a much higher rate than the avg 2bbl per day.

["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."]

February 12, 2007 - 11:14 AM EST

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."