Edge Res Share Discussion Threads

[jamesiebabie] 11/6/2015 08:41

As someone has pointed out to me, we have c.CDN$250k/mnth in G&A and finance costs, so we could afford at this level to either fund two new wells per quarter or one well and pay some debt back; overall it looks pretty positive at the moment and BN could do with getting on with drilling.

[lazarus2010] 11/6/2015 08:41

no idea, and a quick scan of some of their rns's doesn't reveal any such data.

[jamesiebabie] 11/6/2015 08:31

Laz - how much is a well for NOP?

[lazarus2010] 11/6/2015 07:59

interesting stuff re operating netbacks for NP.

11 June 2015

Northern Petroleum Plc

("Northern Petroleum" or "the Company")

Production restart

Northern Petroleum, the AIM quoted oil company focusing on production led growth, provides the following update regarding production activities in north west Alberta, Canada.

Highlights

-- Well 100/16-19 now producing following the purchase and installation of a production package

-- Well will be produced at between 75 and 100 barrels of oil per day ("bopd")

-- At US$55 WTI, operating net back after royalty is forecast to be approximately US$30 per barrel

[jamesiebabie] 11/6/2015 07:35

Some calcs as of the price, yesterday.

WTI - US$61.10
Differential - US$7.65
Price attained - US$53.45
FX - 1.22
CDN$65.20

Royalty - say CDN$11
Overhead - say -CDN$18.50

Netback - CDN$35.71

Production - say 625bopb

Total netback/day - CDN$22,318
Total netback/week - CDN$156,226
Total netback/month - CDN$624,907

Cost per well to drill and tie in c.CDN$600k.

[belgrano2] 10/6/2015 19:37

i'm thinking of adding more, on the cusp of another drilling program with returns looking very rosy indeed. with the right PR this could easily be a good deal north of our current position. I havnt sold anything at all.

[mark10101] 09/6/2015 22:08

Nice to see WTI back above $60 again.

[lazarus2010] 09/6/2015 22:08

This should help...

The 'expected' for the data from EIA tomorrow is -1.273ml bbls for US Crude Oil Inventories


-

•US weekly crude stocks off 6.7 mln bbls
•US weekly gasoline stocks off 3.9 mln bbls
•US weekly distillate stocks up 38,000 bbls
•US weekly crude imports off 357,000 bpd to 7.01 mln bpd
•US weekly refinery capacity utilization up 1.4 pct at 94.3%
•US eekly crude stocks at Cushing off 946,000 bbls

Oil higher on the release showing the bigger than expected draw

[mark10101] 09/6/2015 21:58

JB lets hope so and thanks for your insights today, I have completely sold down several of my oil holdings but hold my full EDG holding.

[jamesiebabie] 09/6/2015 21:39

mark, there has been very little for BN to shout about as the PoO plummeted; but NOW is the time for BN to start shouting from the rooftops as the economics have come back his way; he needs to capitalise on this 'opportunity'.

Results are due in c.2-3 weeks.

[mark10101] 09/6/2015 20:42

Laz, yes and it is not the first time we have requested better comunication from Brad and it has not resulted in anything, however let's hope some of the more recent developments suggest he is preparing to relaunch EDG and increase awareness and hopefully the investor base.

[jamesiebabie] 09/6/2015 20:21

Laz - remember that the water disposal facility will pay for itself much quicker with additional production.

[lazarus2010] 09/6/2015 20:10

mark, I echo your final comment, Brad really needs to start getting some decent pr out there to demonstrate to the markets what we really have here.

The 2P npv10 of 23pps must be somewhere close if we are now getting netbacks similar to 2013 - albeit in C$...I would appreciate npv10 of C$0.23 at the moment!

[mark10101] 09/6/2015 19:31

Thanks JB nice to be reminded why I bought into EDG last summer, as I remeber saying, EDG at 10p (my entry point) had very little downside and huge upside. I still stand by that but it just shows how many loose their heads in investing. The numbers you give as you say are likely on the conservative side but are still very exciting for current and future investors. Let's hope Brad starts communicating this to the market as it seems they need it spelling out.

[jamesiebabie] 09/6/2015 19:15

Assumption of EDG receiving netbacks of say CDN$30/bbl, each new well costs $600,000k and we are producing say 600bopd as we had over 100bopd shut in.

600 * 30 = $18k/day

600k/18k - c.34 days of production be able to pay for a new well.

I suspect the current metrics are better than that.

Remember each well takes no more than 3 days to drill., so this could move rapidly.

[jamesiebabie] 09/6/2015 17:04

Laz - We found oil in Well 3! So we know it is already there.

[lazarus2010] 09/6/2015 16:04

thnx JB...maybe it will extend the heavy oil zone outwards after they drill and find oil ;-)

Considering this parcel is one that was acquired 'recently', presumably at a good price as it's outside the oil window, this could be a very good deal interms of the value of the parcel 3 as well as 12. fngrsxd

[jamesiebabie] 09/6/2015 13:51

Laz they are in parcel 12. I have tried to plot the location of the new wells on the old 3D data we've had before, the northern one appears to be crestal and therefore a good one, the southern one will be seeking to see if the two pools are actually one, bwdik.

BN in the past thought the oil pool reached towards us and hence Eye Hill East has been born.

[lazarus2010] 09/6/2015 13:20

JB, from the eyehill link on the edg website, this looks as if the two permitted wells are outside of the heavy oil play (one may be borderline)? What do you make of that?
The proximity to the existing wells does however mean that they will share infrastructure and water disposal facility.

Zoom in on the maps and it looks like the wells are in parcel 12

[jamesiebabie] 09/6/2015 13:02

Here you go, the wells in green are the previous wells drilled, the two wells in the red oval are the new ones ready to be drilled. At the bottom you can see that the one was only licenced last week.

[jamesiebabie] 09/6/2015 12:04

Knowing what we know about WCS prices and what BN told us last time, ie. we had some capacity shut in, I suspect that the current times are quite good and that we have been pretty profitable and therefore now looking to carry out some more drilling.

I suspect BN and the team have been working quite hard in the background. It will be interesting to see what the rig rates are as and when we do come to drill these wells.

As I've pointed out in the recent past, the price we are achieving i similar to September 2013, when rig rates were high; so this could be yet another win.

Time will tell as ever and BN will have to formally let us know their plans rather than me just finding out via research.

GLTA

[lazarus2010] 09/6/2015 11:58

well at least we now know why the recent drop occurred. Great investing strategy, get out at the bottom of the industry cycle...it's now when you should be adding! Oil is still there, existing wells still producing, costs reduced, WCS/WTI gap at its lowest for years, US$ v C$ most favourable exchange rate for years, which all make for a profitable company with plenty of upside imho

[mark10101] 09/6/2015 10:04

OK my point was it is interesting JB has researched what could be a great boosts and at the same time you get someone stating they are all out. Just seemed like normal AIM stuff.

[monkey puzzle] 09/6/2015 09:20

This is what "womo" over at LSE actually said.....

"I'm out and have managed to recover all my losses in prem and vast. Will be back though but probably after financials as I don't think they will make good reading
Cheers"

Hardly "bad"......

[mark10101] 09/6/2015 08:44

Interesting, a guy on LSE said they have completely sold out as things were looking bad. Suspect there are people in the know.