Taken from my archives of MHR presentations in 2011...
Here is my #1 concern - look at the low case IRR sensitivity plot based on an EUR 362MBoe on Capex $7.5M for Gonzales county acreage sold by MHR to PVA. While I could create a decline curve based on what has been observed in Atascosa county I don't want to mislead because I don't have all the data.
If the EUR was only say 240MBoe are 75% of that is produced in first 3 years (so 160MBoe) its going to take an operating Netback of $45/Boe (which is high) to cover the Capex cost roughly.
That is why I am so interested in the EUR/IRR numbers that are yet to be disclosed.
And historically these were the wells drilled as noted in the July 2011 MHR presentation to which the above also was taken.
NSE Price at posting:
11.5¢ Sentiment: Hold Disclosure: Held