capital raising, page-45

From KEY's own website:

Geomodeling and simulation studies in 2002 for the Lidsey Field indicated field STOIIP of some 9.2 MMstb. The simulation study predicted that a single horizontal well in the Lidsey Field should be capable of increasing total field production to over 500 bopd. Key Petroleum is studying this option in more detail with a view to increasing the developed recoverable reserves from the current 128,000 bbls to 343,000 bbls.


So the Lidsey #2Hz well will increase recoverable reserves by 215,000 barrels?

If this well increased production by 300 bopd and the well operated for 350 days per year (15 days allowed for shutdown/maintenance) then the extra reserves would be depleted within two years (simplistically assuming constant flow rate).

Revenue of US$17.2m assuming $80/barrel, I very much doubt the profits would even recoup the cost of drilling the well given the operating expenses have been running at over $65/barrel for the UK assets.

Why are they wasting their time and our money?