OGPM / LNBG LLC PROJECT
The prospect Known as LA-1 has several other sites that are adjacent to it that are available through the same entity that is selling us the LA-1 site.
The additional lease acreage is known as Fosse Point and adds 6 more producing wells bringing the total active well count to 9 with a combined existing income of $2,500,000 per month Gross “as is”. The additional asset has 16 wells that can be added to the existing production and the total expected income from all wells when drilled will be between $20 million and $30 Million per month. The existing wells will have a work over to improve the flow rate and to update the technology used for extraction.
Out dated gravel packs will be replaced by screens in the sands wells to increase flow by 200% to 500% depending upon the viscosity of the oil and water content. There are two types of new wells to be drilled one is a straight vertical 7,000 foot well with no fracturing required at a cost of $3 Million per well and the other is a 15,000 foot horizontal well with fracturing that will cost $8 Million per well. With 10 Vertical and 6 Horizontal wells that are needed to be drilled.
Total cost for additional drilling will be $78 million and this can be done at any time over the next few years or all at once and be done this year. The in ground PV10 reserves are 20 million BBL oil and 1 Trillion Cubic Feet Gas. Or in cash terms $2 Billion in oil and $6 Billion in Gas over the next 30 years.
Decline rate of 10% per year for the first 5 years then it levels out to about 5% or less for the next 25 to 30 years. These wells are long lived and produce for several decades. The chart below will show the 10% decline.
5 Year snap shot with all new drilling done in 2014&15 showing the increased income in 2016 (+/- 10%)
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