Q3 Final Production
Final production numbers should come in a bit higher than the associated operational update figure of 141,000 Boe.
Consider the following:
6 wells drilled and producing in Q2 with stated production of 40 Boepd
4 wells drilled in Q2 completed and producing in Q3.
9 wells drilled and producing in Q3.
If you take the 6 wells at 40 boepd the weekly production is 1680 Boe. In the Q3 operational update it was noted that the 19 new wells are currently averaging over 50 BOEPD per well. Initial flush production rates were 50+ for those wells completed in Q3. I feel that those wells drilled and producing in Q2 are still producing 40 Boepd. I feel the wells drilled in Q3 are producing somewhat more than 50 Boepd on average. To be conservative I'm going to continue to project 6 wells producing at 40 Boepd. I'm also going to be conservative and project the remaining 13 wells are producing only 50 Boepd.
Q2 production + 6 wells drilled in Q2 + 13 wells drilled in Q3 = total Q3 production*
*Please Note: I do NOT account for 1.5% decline in production from Q2 amount. This amount is more than offset by refracs performed in Q2 and Q3. (We will discuss refracs soon.)
My REVISED weekly projected numbers for Q3 are as follows:
__________NQ3__FQ2___T1________T2__
Week 1.....350 + 1680 = 2030...... 2030
Week 2.....700 + 1680 = 2380...... 4410
Week 3....1050+ 1680 = 2730...... 7140
Week 4....1400+ 1680 = 3080..... 10220
Week 5....1750+ 1680 = 3430...... 13650
Week 6....2100+ 1680 = 3780...... 17430
Week 7....2450+ 1680 = 4130...... 21560
Week 8....2800+ 1680 = 4480...... 26040
Week 9....3150+ 1680 = 4830...... 30870
Week 10..3500+ 1680 = 5180...... 36050
Week 11...3850+ 1680 = 5530..... 41580
Week 12...4200+ 1680 = 5880..... 47460
Week 13...4550+ 1680 = 6230..... 53690
NQ3 = New Q3 production
FQ2 = Full Q2 production from 6 wells drilled and producing in Q2.
T1 = Weekly total.
T2 = cumulative total for Q3.
With Q2 ending production of 106,394 BOE it should be easy for ARD to report final Q3 production of up to a MAXIMUM (perfect conditions less normal declines) of 160,084. For purposes of nice round numbers lets just call it 160,000 BOE in Q3.
I think you begin to see the POTENTIAL of ARD drilling. Why is ARD reporting less than 160,000 in the operational update?
Probably because production doesn't always work like a well oiled machine. (Pardon the pun.) Also the oil inventory on the last day of Q3 probably was not delivered. Therefore this oil was not sold and therefore not counted as official production.
It looks like if we back off our MAXIMUM POTENTIAL by 15,000 BOE or 10% going forward we should be able to generate a range of probable production.
160,000 - 15,000 = 145,000
160,000 - .10 = 144,000
We should have ARD come in between 144,000 and 145,000 for Q3 which is slightly higher than the Q3 operational update figure.
REFRACS....
At the end of Q2 there were 3 refracs that were producing.
In the Q3 operational update it was stated that average refrac output was 20 Boepd.
Since refracs produce less than a developmental well I'm projecting that the new Q3 refracs occurred towards the end of Q3.
My production projections for these workovers are as follows:
__________W1____W2__
Week 1.....420......420
Week 2.....420......840
Week 3.....420......1260
Week 4.....420......1680
Week 5.....420......2100
Week 6.....420......2520
Week 7.....420*....2940
Week 8.....560......3500
Week 9.....700......4200
Week 10...840......5040
Week 11...980......6020
Week 12..1120.....7140
Week 13..1260.....8400
W1 = Weekly production @ 20Boepd/well
W2 = Weekly Cumulative production for Q3
*Week 7 production was 420 due to Q2 refraced well going offline and new Q3 refrac coming online simultaneously.
With natural projected declines of 1.5% each quarter it is easy to see that the workovers more than compensate for any declines from previous quarter's total production.
106,394 * 0.015 = 1596 (Lets round to 1600)
Q3 Refracs production = 8400 BOE.
Q3 Natural decline = 1600 BOE
Q3 excess from refracs = 6800 BOE.
In conclusion, it is easy to see the true production capability of the FY2005 program. While ARD will more than likely report final production results of 144 MBoe to 145 MBoe their potential was for about 15 MBoe more. In addition, the 7 workovers from Q3 plus the 3 workovers from Q2 (minus 1 workover in week #7) provide spare capacity (cushion) of 6800 BOE to compensate for any natural production declines or unexpected production declines that could be caused by any number of things (mechanical interruption, excessive natural declines, scheduled maintenance, etc.) It is apparent as to why some analysts were calling for Q3 production as high as 163,000 BOE for Q3. The growth probabilities and potential of owning ARD shares are truly incredible.
Final production numbers should come in a bit higher than the associated operational update figure of 141,000 Boe.
Consider the following:
6 wells drilled and producing in Q2 with stated production of 40 Boepd
4 wells drilled in Q2 completed and producing in Q3.
9 wells drilled and producing in Q3.
If you take the 6 wells at 40 boepd the weekly production is 1680 Boe. In the Q3 operational update it was noted that the 19 new wells are currently averaging over 50 BOEPD per well. Initial flush production rates were 50+ for those wells completed in Q3. I feel that those wells drilled and producing in Q2 are still producing 40 Boepd. I feel the wells drilled in Q3 are producing somewhat more than 50 Boepd on average. To be conservative I'm going to continue to project 6 wells producing at 40 Boepd. I'm also going to be conservative and project the remaining 13 wells are producing only 50 Boepd.
Q2 production + 6 wells drilled in Q2 + 13 wells drilled in Q3 = total Q3 production*
*Please Note: I do NOT account for 1.5% decline in production from Q2 amount. This amount is more than offset by refracs performed in Q2 and Q3. (We will discuss refracs soon.)
My REVISED weekly projected numbers for Q3 are as follows:
__________NQ3__FQ2___T1________T2__
Week 1.....350 + 1680 = 2030...... 2030
Week 2.....700 + 1680 = 2380...... 4410
Week 3....1050+ 1680 = 2730...... 7140
Week 4....1400+ 1680 = 3080..... 10220
Week 5....1750+ 1680 = 3430...... 13650
Week 6....2100+ 1680 = 3780...... 17430
Week 7....2450+ 1680 = 4130...... 21560
Week 8....2800+ 1680 = 4480...... 26040
Week 9....3150+ 1680 = 4830...... 30870
Week 10..3500+ 1680 = 5180...... 36050
Week 11...3850+ 1680 = 5530..... 41580
Week 12...4200+ 1680 = 5880..... 47460
Week 13...4550+ 1680 = 6230..... 53690
NQ3 = New Q3 production
FQ2 = Full Q2 production from 6 wells drilled and producing in Q2.
T1 = Weekly total.
T2 = cumulative total for Q3.
With Q2 ending production of 106,394 BOE it should be easy for ARD to report final Q3 production of up to a MAXIMUM (perfect conditions less normal declines) of 160,084. For purposes of nice round numbers lets just call it 160,000 BOE in Q3.
I think you begin to see the POTENTIAL of ARD drilling. Why is ARD reporting less than 160,000 in the operational update?
Probably because production doesn't always work like a well oiled machine. (Pardon the pun.) Also the oil inventory on the last day of Q3 probably was not delivered. Therefore this oil was not sold and therefore not counted as official production.
It looks like if we back off our MAXIMUM POTENTIAL by 15,000 BOE or 10% going forward we should be able to generate a range of probable production.
160,000 - 15,000 = 145,000
160,000 - .10 = 144,000
We should have ARD come in between 144,000 and 145,000 for Q3 which is slightly higher than the Q3 operational update figure.
REFRACS....
At the end of Q2 there were 3 refracs that were producing.
In the Q3 operational update it was stated that average refrac output was 20 Boepd.
Since refracs produce less than a developmental well I'm projecting that the new Q3 refracs occurred towards the end of Q3.
My production projections for these workovers are as follows:
__________W1____W2__
Week 1.....420......420
Week 2.....420......840
Week 3.....420......1260
Week 4.....420......1680
Week 5.....420......2100
Week 6.....420......2520
Week 7.....420*....2940
Week 8.....560......3500
Week 9.....700......4200
Week 10...840......5040
Week 11...980......6020
Week 12..1120.....7140
Week 13..1260.....8400
W1 = Weekly production @ 20Boepd/well
W2 = Weekly Cumulative production for Q3
*Week 7 production was 420 due to Q2 refraced well going offline and new Q3 refrac coming online simultaneously.
With natural projected declines of 1.5% each quarter it is easy to see that the workovers more than compensate for any declines from previous quarter's total production.
106,394 * 0.015 = 1596 (Lets round to 1600)
Q3 Refracs production = 8400 BOE.
Q3 Natural decline = 1600 BOE
Q3 excess from refracs = 6800 BOE.
In conclusion, it is easy to see the true production capability of the FY2005 program. While ARD will more than likely report final production results of 144 MBoe to 145 MBoe their potential was for about 15 MBoe more. In addition, the 7 workovers from Q3 plus the 3 workovers from Q2 (minus 1 workover in week #7) provide spare capacity (cushion) of 6800 BOE to compensate for any natural production declines or unexpected production declines that could be caused by any number of things (mechanical interruption, excessive natural declines, scheduled maintenance, etc.) It is apparent as to why some analysts were calling for Q3 production as high as 163,000 BOE for Q3. The growth probabilities and potential of owning ARD shares are truly incredible.
posted by -Aztec- at 1:01 PM
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