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11/12/13
12:47
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Slampoil
I think you are compering the wrong things.
USD 7.0 million cost of each well and total investment of USD 385 million is like a Capex.
With a US$385m your earnings would be;
Sale of a barrel is US$90 today and it will go up more by the declines in production over the years.
Cost of a barrel is about US$50 up there.
That gives us profit of US$40 per barrel.
THAT MAKES;
55 wells x 365 days x 300 boep net x USD 40 PROFIT per barrel of oil =
US$ 240 MILLION NET PROFIT EVERY YEAR.
I think it is viable to invest US$ 385m Capex for making US$ 240m a year.