Ok, so just finished listening the to the BRR for the quarterly. It can be found at the top of the list here: DLS BRR
As always Brad spoke well and all questions were answered openly. Wish all companies would provide recordings of the meetings. So much more color in the explanations etc.
Some of what I am writing is nothing new, but it helps me to not lose focus (and so I read through it later).
PEL 91, while production was lower, mainly due to water cut and new upgrade not being brought online quite on time. Now done, plus new Bauer wells online, plus new fields coming online. So production should easily ensure they hit their guidance. As an example, Kalladeina will produce at appox 700-1000bopd, it is ready to be turned on now, with more fields coming on after that this quarter.
Stunsail and Penninton step out wells (both were P&A) - Which some may have seen as a negative, but because both were very aggressive step out wells, and both found moveable hydrocarbons (Pennington found 2 metres of net pay), they actually achieved their goals. Deliniate the extent of the fields. So field development will progress as normal. Neither fields 2P recoverables are effected as the wells confirmed the initial estimates.
PEL 106 - Wet gas - while lower production, This only due to it being fed into high pressure system. Once upgrade is done in Jan, production will ramp back up to gross of 20mmcf/d + liquids etc. For an extended period (years?) Field compression costs approx $2-3 million. Will be needed at all the Satellite fields, but not until after a couple of years when the gas pressure reduces.
DLS/Santos Western Gas projects - Now moving ahead with 4 exploration and development wells this quarter and another 4 straight after that. Also, Candenza field to come online if drilling success occurs after a year of being offline due to pipeline issues. 3D seismic infill now ongoing.
Juniper-3 Well result - similar pay interval to Juniper-1 back in 2004 (I looked it up, interval of 23 metres with free flowing oil of approx 60bopd, which is a great result when they are going to frac it anyway)
Also, the well was a large step out from the Flax field, 6kms. To me the implication is clear, while ACER may have been average at some things, the independent reports which assessed the possible OIPP for the Flax/Juniper fields are looking more like a reality versus a dream.
Also - Brad said the team were very happy with the result and want more wells drilled ASAP.
Juniper-3 also the first well to be drilled using the 3D seismic (Flax/Juniper 3D being reprocessed because it was done without using all the new processing techniques-I have simplified what Brad actually said)
Bascially - very important because Flax/Juniper are tight reservoirs, so the more you know, the higher the chance the wells to be drilled will do everything that is expected of them. Juniper-1 Oil Discovery 2004
Flax-1 - Nitrogen unit arrived late, so only now doing the testing. The 50% oil you mention g12m0, I assume means the other 50% is the propellant used to frac the well. Brad was a little cagey about the actual results, as they are not really assessed yet, but he hinted that he expects the team to be very much wanting to get a move on to the other Flax wells...... No definitive date for oil production, but he mentions 10 days or so for some sort of conclusion to the testing. Have to wait and see I guess.
Unconventional Wells - Charal well - 13 fracced stages (which seems like a very impressive number compared to the BPT/Chevron wells). They do have an operational issue.
So they are putting the rest of the fraccing of Anakin on 'Pause', until they can better understand the Charal results, or thats how I understood it. Above all, its a delay to fraccing, not the wells. Hopefully it will only be a small delay. No actual timeframe given.
PRRT - none to pay for a couple of years still, especially with the lower oil price.
Operating costs fell this quarter, largely attributed to BPT being an excellent operator and slightly lower Government taxes due to falling oil price. Also because of slightly lower production, less oil was moved by trucks, which shows that the BPT/DLS J/V have quite a few options to ensure profitablilty if the POO really drops down.
Brad sums up at the end, he mentions that having locked up PEL 570 and PEL 101, the second half of the year will hopefully prove their reasons for so strongly wanting the acreage etc.
Ok. I think that's about it. I am a very happy holder.
DLS Price at posting:
$1.18 Sentiment: Buy Disclosure: Held
