Hi LT, Not really a stretch I think if you consider that the 18...

Hi LT,

Not really a stretch I think if you consider that the 18 wells we have now awaiting connection should probably get us pretty close to 2000 boepd just by themselves.

Considering we were able to drill 7 wells in May and 4 in June, I was making the assumption based on drilling 5 wells per month for the next 6 months. Being pretty conservative and assuming a stabilised rate of just 30 boepd I get 48 wells (18 awaiting connection + 30 drilled) x 30 boepd = 1440 boepd. Add that to our current 1273 boepd and you get 2713 boepd. So 2500 boepd is actually probably underestimating.

As to the cost, as I said I think it could easily be afforded from current cash at hand and expected cash flows. The cost of 30 wells ($650 000 per well) = $19.5 million. I will assume we drill the wells and so I will assume a 1500 boepd average for Sept quarter (much higher initial rates once all wells come online should easily make up for any time spent waiting for connection), and a 2000 boepd average for the Dec quarter. Going from the Dec quarterly, production of roughly 1000 boepd for the quarter gave us around $5 million net. therefore these production numbers could give us roughly $7.5 million for the Sept quarter and $10 million for the Dec quarter. Add that to our current $11 million gives us $28.5 million. Taking out say $2.5 million a quarter for admin still leaves around $4million for further acreage purchases, so as you can see all quite easily achievable.