WARNING: Amateur at work. No professional experience. DYOR
Thinking about it logically, I've tried to answer my own questions.
EUR per vertical well = 60-100Mbbl of oil (40 acre spacing)
Since reserve reports tend to be on the conservative side, lets say they alocate 50Mbbl per well.
After a successful drill, the drilled (40 acre) section is labelled proven producing. The 4 sections around it are asigned proven non producing. So in total each successful vertical well proves up approx 250 Mbbl of oil
The report is dated June 15. At that stage they had 2 verticals and their share of the Bladder well. Working just off the verticals, the ML lime 1P reserves should be approx 500 Mbbl. The rest should be due to legacy assets at Tulsa or other locations.
Perhaps more interesting is that the next 10 verticals should, by this logic add another 2500 Mbbl to the 1P reserves (ML only). Production should increase by 400 BOPD (long term stabilised flow rates).
So by March Next year I'd expect 1P reserves of 3 million (ML only) Production 700 BOPD
On fundamentals I'd value this at approx $100Million. No value given to Kansas assets or stacked plays.
Its also important to note that AOK is becoming increasingly derisked - drilling into proven / possible reserves in a well understood play. This is quite different from gambling on drills with a 30% chance of success and questionable economics.
Status changed to BUY
AOK Price at posting:
10.5¢ Sentiment: Buy Disclosure: Held
