Hi @striebs How did DNR get into trouble ... most likely over...

Hi @striebs

How did DNR get into trouble ... most likely over leveraged on poor returning projects. This is their slide and not to say it applies to ELK but like most things it should be considered.



Clearly DNR has a lot of debt if Interest Accounts for $7.29/Boe of field level CASH COST.

Overall CASH COST almost $34/BOE vs average realized price of $39.95/BOE

What's missing? The CAPEX that was put in to find and develop the projects - and for most that is the item called Depreciation. Because it is non cash (as in spent in earlier periods) it is conveniently ignored but it is a real cost - just like wages - and is simply spread out over time. This is what I mean by earnings. Include that and they are destroying value for their shareholders (debtholders not so much).

So yes Capital Efficiency needs to viewed through multiple lenses of the projects and the company to see how much incremental capital in takes to grow the company.

Intrigued by the EOR to Australia aspect ... does Australia have any such project. I guess there are likely projects in the Cooper Basin that would benefit ... easy, plentiful and cheap CO2 from the gas processed at Moomba.