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Originally posted by orion123
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The gas action in crude is very different from the gas in a bottle. The oil in a crude production is produced from the bottom of the formation. So as an example shake your bottle and then drill a hole in the bottom of the bottle. The gas is pressurising whatever's in the bottle and forcing it out the bottom. It's impractical to produce gas cut crude from the gas cap top. As for me being wrong about any oil flow being positive I cannot see a producing oil well being a negative asset unless it's producing less oil/gas than it's operational cost. Should it produce above operational cost it will eventually pay back its' infrastructure costs and the Florence field wells are historically long life producers. This latest well will be producing from the base of formation and until the flow test is completed I'll refrain from commenting on its' viability. All shareholders of course are hoping for a good result. Allow me to put a very base case: Assume the well produces a marginal 100bbls/d and our directors say we're profitable above $30/bbl so giving us an assumed minimal nett profit of $10/bbl that's $730,000./year nett profit. That's $US30.00 so to us Aussie $ holders add another 20%. To me that's a reasonable assumption and if the well produces below expectation I'll be disappointed but if above I'll have my holdings at least partially vindicated as this is then pointing to a new era of success in selecting drilling sites through new technical knowledge. Then we have the re-entered well being horizontally drilled to enhance production totally at the cost of the joint venturer and for a minuscule 5%. They also must have sufficient reason to believe. For what it's worth I think the shares have been abandoned at this stage as at todays' price of 2.2c that equates to .002c before the reduction. I adhere to an old adage that states that you usually always win if you can last the distance. Keep the faith.
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