Agent,May I enquire where $8 million comes from?From back of the...

Agent,

May I enquire where $8 million comes from?

From back of the envelope calcs, if BOTH wells average 1,000 boepd @ $90/boe (mainly oil with some gas) over 30 days, I get the following:

1.5 net wells @ 75% NRI

= 1.125 NRI net wells

Combined Revenue = 1.125 * $90 * 1000 * 30

That’s a combined $3.03 million in the first month from both wells.

The wells cost a combined $14.5 million to SEA. If they’ve been online for 2 months before SEA takes over, they’ll only still pay off about a third of the CAPEX.

There is going to be a very big discrepancy between revenue (even including TXN’s existing production) and CAPEX/OPEX from all these new wells, so SEA will be adding a lot of money onto that bill at the end.

Obviously SEA keeps the production of those wells forever, so I’m in no way arguing economics. I’m simply saying the end price will be well and truly higher than the script price alone.