Latest / Financial Survival Network / Prospera Energy Ramps Up Summer Production with CEO Samuel David

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Prospera Energy Ramps Up Summer Production with CEO Samuel David · Financial Survival Network

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Prosperous, increasing production, reducing costs. We're actually cutting the Phase two Alfair
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development plan. It's on track. The weather conditions just something we cannot control,
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but we are getting a little more having a better understanding. I think
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it a budget that reduction into a production forecast. The Financial Survival Network now
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more than ever, the Financial Survival Network. And welcome. This is Financial
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Survival Network. I'm your host, Carrie Letts, and we are getting an
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update to date, a long awaited one that I've anxiously been seeking on Prosperit
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Energy. When we last connected with CEO Samuel David and White Tundras, shebam
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guard it was the dead of winter, and I know that in the in
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Canada, in Alberta and Saskatchewan, winter has a whole different meaning that it
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does in Laurida, for sure. And Sam, I know you've had a
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couple of exciting plane rides, but you're here to talk about it. Chapin,
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We're great to have you back as well. Sep. I guess we
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should get to the meat of it as production going in Prospero now. Sure,
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good to see you all back in Canada. You're right, the winters
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in Saskatchewan especially in the berries. You know, it could be rather chilled
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and rather cold, and it can get into minus fifty degrees where even oil
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starts freezing in the pipeline going through that experienced last winter, I had to
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amplified to exposed the infrastructure that needed attention and also other resources, the personnel
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as well to attend to the exciting capital projects that we have lined up for
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the warmer months. So prosper I took a step back and ten ensure the
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infrastructure and the resources, the personnel, resources and the monitoring system are in
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place to accommodate the appreciation of production and the capital project development projects that we
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have lined up for the summer months. And we have done just that.
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There's a lot of gas handling issues, compressors, sweetener to ensure that gas
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is not sour and spoiling the engine and we're not doing emitting sour gas.
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These kind of things needed update. We needed to ensure the pipelines can handle
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the pressure. We need to ensure the injectors are by in place as we
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wrapped up the production to accommodate the injection rates and the volumes that we see
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from the appreciation of production and increasing the volume and we've been working on that.
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That has been a focus. So as we have i mean to the
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conclusion of that, and we're still working on it. The production has been
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slowly ramping up as as you know them. Back in the winter we actually
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shut down the battery so that you know, pipelines do not break and spill
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and cost spill. Now we're getting closer to back to that volume up close
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two thousand barrels a day in the weeks that we're speaking and you know gas
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associated with it, probably another one hundred and fifty bows and two buis.
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But into the summer it's got into the month will be a little past than
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what we attained before. We're hoping to obtain closer to twelve fifty barrels a
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day, closer to fifteen hundred buwees at eight and we're end of the month.
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As we're doing is we're also getting prepping all our capital development projects,
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which is the Brooks Field. You know, we're medium light oil tested favorably
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at hundred barrels and three hundred barrels a day, and we've been we have
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delineated the pools geologically and seismically because we have three d s eyes make and
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we're very excited to drill eight additional wells from one pad, uh you know
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the pad that we're going to eye in the well that we just tested.
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We're going to drill another three more wells. So the surface there was only
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one single surface and centralized battery that is underworks right now pilot licensing and you
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know, surveying and least prep and everything, and we're hoping to start commends
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that drilling about eight weelve program in June in amount of the first few weeks
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of June. Similarly, the horizontal development that we padded it last year,
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the one well has tested is continues to produce. We haven't fully drawn on
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it. And when you look at the production, I mean it's doing sixty
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barrels or any barrels a day. There's a lot of food levels in the
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World War. But we're not going to just ramp up and pull in the
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water. But it shows the indication the capability of that well and the other
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well, second well that we piloted, we did had to plug back because
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of the gas we encountered. The gas was persist stan couldn't you kill it
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in one way? It was not a good thing because we didn't have the
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control of the wall. In another sense, we got reserves. We got
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gas reserves from that zone. So those two pilots, you gotta remember,
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pilots are men to understand the reservoir, so it could set up the development
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program. So we don't want to go into development program not knowing what we're
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going to encounter. So we have those pilots and tweaked us technically that being
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a built section, we have to have a control of the well. And
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he had to do that using a re entry. You need a commercial horizontal
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and as it is in the later role, it's depleted reservoir, so there's
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going to be lost of circulation. You want to be in full control of
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the well and dissipating that I could be lost a circulation. It cannot be
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playing around with the building section. These pilots pilot wells helped us to understand
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and stage this ten well program that it's commencing also in January. Are in
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June and the first speak up, so we have a good healthy capital program.
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Medium light oil corisanto ones combine. These two ip could be anywhere in
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the fifteen hundred barrels range. But you know we a conservative, we say
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we should be able to add a thousand barrels if you execute all of this
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over the summer months. Where are we going to incur less costs because we're
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not drilling in the winter ones and we can also bring these wells online.
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So that's into this month, we expect to be twelve hundred and fifteen barrels
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a day. You know, with gas, we could be fifteen hundred boes
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in over June, July, August, we should be a September gradding that
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executing that capital program, who should be adding thousand plus barrels a day,
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So that's a gas It's possible then that you could see before the end of
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the year doubling of production. Though I always hate to commit these, you
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know, these winters. That seems to kick my ass. So I you
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know, one of the directors, you know, Brand mccadoll, who who
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knows the scotchewn really well, go Sam always you know, be conservative.
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Uh and and decreased by twenty percent in the winter accommodated for the winter reduction.
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So yes, where we you know, to answer your question, yes,
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I cannot tell you exactly where you're going to be, but there's specially
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addition, this this year is a transition year where we were struggling to just
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break even. Now we're going to be well passed breaking and be profitable and
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also eliminate all the legacy arrears by end of this year. So profitability,
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and you know, we continues to reduce our our r O LMR program and
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I reduced the surface the you know, the footprint on the on the surface.
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Uh. And these these costs going to start reflecting, you know,
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a little bit this year, but more so towards the next year. So
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prosperous, increasing production, reducing costs. We're executing the Phase two offer a
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development plan. It's on track. The weather conditions just something we cannot control,
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but we are getting a little bit more having a better understanding. I
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mean, you budget that reduction into a production forecast. Okay, great,
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So Chavam from your perspective as a strategic investor, Sam's pretty much executing the
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plan, right Yeah, yeah, Bet, I think this is what we
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were looking for is this is a company was coming out of this this legacy
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arrears. They had a lot of wells to abandon. There was a lot
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of suspended wells infrastructure that had not been maintained by the previous management team.
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Things were just left kind of to decay. You can look about it if
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you just look at the Prospira corporate presentation, would the previous production how it
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was dropping coming into twenty nineteen and twenty twenty. So I think Simon the
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team have done an exceptional job getting through that. As he mentioned, twenty
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twenty two was more of a pilot year. We drove the two side tracks
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in which basically we went into an existing world war and went horizontally, which
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carries a little bit more a little bit more risk. It is cheaper,
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but you do carry more risk that the world war is unstable, you could
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get lost circulation, you could get gas kicks come out of that. You
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don't already have as much control. So we had those two pilots last year.
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And then of course the Brooks property was also acquired last year, and
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now the company has the money through our private placement, through the calf flow
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they've been generating, and then through the recently completed well partially completed debt finance
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and arrangement. The company now has the money to go and really execute on
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the plan. As time goes on in and I think I've always said this,
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whether it's with Prospera, whether it's but my other investments, is there
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has been a step change in technology in some of these heavier oil fields and
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even some of the media light oil fields over the last decade. But the
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problem is companies never really have the money to do anything from twenty two d
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onwards. Some of these assets got stock in some of these junior companies,
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or they were not taken care of in some of the bigger companies. And
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now that we're here ten years later, we have better, better geosting technologies,
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we have better well control, we have better curse, we have just
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longer laterals we can drill. And I'm looking forward to the summer drilling program
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here. And I think one of the points that Sam hit on that's that's
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really key is when you look at well results of heavier oil wells such as
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the cutbolt of Cuthbird and loose Land and heart sill horizontals. We don't produce
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these wells like it's like a motney well or shale well where we jack up
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production and then we let it drop. These wells are aren't more for a
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reservoir science. There's more reservoir management and reservo engineering, which means you let
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your fluid levels stay high, you slowly speed up the pump to bring those
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down. You don't want to get sand in flux, you don't want to
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get the water taping in. You really want to produce them in a very
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stable manner. And that's what makes these well so fantastic. In my opinion
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as a strategic investor, is I don't get that decline rate. If my
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will is making thickty barrels today, it may make forty eight barrels filve months
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from now, it may make forty five barrels three years from now, because
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all we're doing is drawing down that fluid level as opposed to losing d reveser
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ward pressure, which is out of the the overy problem in unconventional wells.
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And really company stopper declines nod stop, whereas this is more of a building
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a company step by step by step. And that's really why we invested Urine.
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Looking forward to the eighteen World Summer program here up college really going.
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And I add to that, Well said, you know, reservoir management is
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key in these uh in these heavy oil reservoir because relative permeability, uh,
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you know comes into play where you know, lighter food. He's gonna if
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you drove, if you spend your our pump faster, you're gonna have higher
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draw down and lighter fluids gas and water, it's gonna superseded or heavier.
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Well. Now, this our method has been substantiated by Insight, a third
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party who will evaluated us. They gave us a two p reserve of one
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hundred thousand barrels of recovery by this pilot well you know, by the way,
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were also it gave us a couple of million barrels of HUDs and developed
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reserves that we you know for the forsulsos that we go into the drill.
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So it has been substantiated in our method and it's recognized it can add reserves
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and production. Now in addition to that, we've already looking into polotating it
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to pressure support this reservoir with the viscous fluid and we're fairly close to that
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and that's also going to be piloted this summer. Now, once that has
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been substantiated. By the result, these wells can have a PD proven developed
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reserves in the order of two hundred thousand or three hund barrels a day barrels
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reserves and it'll recognize this additional, this substantial see significant remaining reserves can be
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actually recognized as proven reserves, and that will elevate the value of the company
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to other level. And as you know, you know, every year we've
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been elevating our IMPV value and reserves. We increase our reserves by fifteen three
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percent in twenty twenty two. I expect to even actually hire increase in the
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upcoming year because of all the reserves on the horizontals and Brooks whiles that were
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adding. So Prosperita is in the works of recognizing or proving that significant remaining
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reserves. Technical application and results right, and so one thing when you're when
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you've got these long life wells, and then your cost of maintaining production also
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goes way lower. You don't have to do recompletions and all these other techniques
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to keep the well producing. Right, when we sustain that lower draw down,
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we supported with pressure support, a proper pressure support. You're maintaining a
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piston, you can get your decline now to you know, even five to
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ten percent less than ten percent when you're maintaining that it's only maintenance costs that
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you're going to occur as we complete our LMR program a three year program.
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We're in our second year. Yes, then the fixed operating cost that will
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be reduced, and you you have steady stream of volume of barrels every month.
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Price. We cannot control our costs and volume with your control and that
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is prosperious focus. So SBAM, you know, as much as this is
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a production story, because by the end of the year we could be fiftyfold,
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production could be up fiftyfold from where Sam took it over, it's also
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a cost cutting and a technology story, right, Yeah, certainly. I
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think this is one of the things that's maybe missed in some of the growth
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companies. People will go into it and they will look at the financials and
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say, well, hang on, this company's break even is just way too
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high. We can did best of this. But what they're missing is as
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the company's production grows, your operating cost per barrel comes down significantly. Some
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of these assets that Perspira owns, they used to run ten, fifteen,
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twenty thousand barrels of fluids through them. The infrastructure already placed, the pipelines
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have already placed, the compressions already placed, and as we increase production,
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your your fixed costs the same on operating this equipment, and then your variable
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cost per barrel keeps coming down, and therefore we get a double weam effect
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where not only is production increasing, but your production cost per barrel then decreases.
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So there's definitely a story there on the operating cost per barrel bringing our
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net back a lot higher. And the technology. I think the technology.
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When you have a field that has total combined four hundred plus million barrels in
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place, you have a seventy eight nine percent recovery factor that to me tells
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me, okay, I've got three hundred and sixty five million barrels still in
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place. And as kind of I mentioned I alluded to earlier, there are
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technologies in the last by seving ten years that have come up which made these
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types of fields very attractive, whether it is with NEO orzon't drilling, whether
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it is with the upgrading up the oil that comes out of the ground,
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and even some of be a polymer bloods, which I'm very excited not it's
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hardly sure where we are in that process, but I think this fields,
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these fields are very conducive through some sort of higher viscosity fluid coming in and
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helping a push that oil. We've seen very very successful palmer floods in saskatchework
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already in very similar reservoirs, including one that's just to the east of the
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Prospira Cuthbert a cupbird Field, And there's very good fax credits and royalty credits
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for putting these procedures in place. The governments are pushing or more recovery because
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they end up getting more voyes from these recovery. So there are very very
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strong government programs in place where companies can increase production and partly paid for by
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the government, which then less a reduced the operating cost and increase barrels and
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produce a lot more of this owner of the draught. I think the main
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point though, is you have to have reservoirs with oil in the ground.
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If somebody's telling you you can do this on a reservoir with a couple of
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million barrels left in place at a forty percent recovery factor, not exactly true
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when you have four hundred million barrels in place with at eight point five or
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nine percent recovery factor. Now That gets me excited. And I think that's
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that's really the story we're betting on here. And as some of the technologies
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are are being implemented and iterated as we speak, the pilot is not what
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it could be your best, most effective way of producing the reservoir. That
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is just a pilot. It gives you more information, It lets you delineate
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the reservoir unlets you get some information on the pressure i'll the reservoirs behaving,
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and then you keep iterating that process to get better and better and better.
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And this is just year one, sim said, And and we're now offer
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the races with the multi well drilling program without increasing our liabilities, without increasing
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any surface pod exposure. And I think is really setting the stage up.
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I think I said this on a previous podcast Prosperities. Now in the escape
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velocity out of Earth and and once again into low orbit, it's a lot
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easier to get into high orbit from there. It's just the way of physics
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and science works than it applies to reservoirs as well. To carry that analogy,
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you know, it's like Elon Musk shooting a rocket up in the air
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and not expecting it to go up, but learning from how it went up
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and how the flight took place so that future successes will no doubt in Herr
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and Sam So acquisitions obviously made a few along the way. And there's it's
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kind of a wide opening space there in your areas. What are you without
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giving away the show, what do you forest see for the rest of the
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year. Before I get into the acquisitions, I get a comment on two
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things about and rocket and orbit and all that stuff. I'm just a simple,
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you know, a simple silly immigrant to that's just trying to do things,
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you know, realistically and economically. You know, I don't know about
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all of that. Uh. And the second thing uh, Suban mentioned about
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I'm not sure where we're at with the polymer flood and and you are recovery.
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I'll just give you a quick update on that polymer flood. We have
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noticed analogy. We have been looking at all the nearby adjacent producers flying polymer
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and they're getting some good results. We've been looking at all the technical parameters,
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the viscosity and comparable and what we can do and what we have in
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our on our end. And there's been a couple of technical engineers I've been
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working on it, and we also noticed polymer flood could be very capital intensive
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if you go on a megascale at a battery level, blenders and things like
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that, So we were planning to divide that into smaller pieces and do it
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individual wells, and maybe perhaps look a look at liquid polymer as well,
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so that it's not in a megascale and you mounted investing in millions and millions
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of dollars at the battery and then you're putting all types of pipelines distributed at
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maintaining it. We thought we could do a single well injector with a flood
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pattern and we kind of fitted in the entire field. That seems to be
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very cost effactor. We've been looking at that so that throw infrastructure. We're
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doing that and actually, you know, a place like loose Land, if
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that starts working, we don't need to drill horizontals. We can just use
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the existing vertical and this we've been properly. You know, that reduces a
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lot of capital. Also, there's another technology which is very interesting, is
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nano technology, and we've been looking at it too, so I think there
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might be a possibility there and we're progressing on both. We might pile it
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both in a loose light field. Some of it maybe in a better API
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and might work, you know, some of them maybe works better and higher
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lower API. But both of them's going to be pilot over in this summer
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and we're fairly close. We're on the sixty seventy percent range here. But
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you know, Prospera does a lot of pre planning, a lot of development.
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We look at all the technical parameters, will do some lab testing and
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see how it's going to work. We ensure that the injector as a connectivity
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to the peripheral wealth by do an injectivity die test and things like that,
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looking at it geologically and seismically. So we reservo our management for longibility is
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how Prosperity takes its approach, and surely it is not really capital intensive around
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spending a lot of money getting permits and construction and deserving the environment using what
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we have. We didn't want to Seeing the kind of the environmental footprint is
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one of the objective with the ESG initiatives. So along that same path,
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you mentioned that acquisition oswere has some criteria and corporate criteria. How we look
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at our acquisition, we like to expand in the core area of similar so
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we can utilize local community services that we have already established. We're not going
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to go too far from various part of the provinces. That's going to incur
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a lot of additional channeling costs and setting up course area. Brooks is nearby
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Calgary and it's actually on the way to Saskatchewan where our assets are, so
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it's convenient for our staff to go to the field, you know, to
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go to either field. We might not look at that, but it's very
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convenient for us to go and monitor and interact and operators to come here.
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It creates good collaborative work environment. We are looking at expanding the current area
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LR has gone up. We can accommodate liability without paying money, and that's
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the first acquisition and on look at. But it does require development that can
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expand our oil in place to another level and continue to increase production because it's
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more are the same optimization potential. Maybe if I mutter to six soundred thousand
23:03
brows a day and then get into the same retire a lot of these verticals
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and new horizontals, and that is in play and I'm hoping to complete that
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by quarter of two room my end of quarter two, well, you've got
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a lot of things going on and more importantly moving ahead. Production is going
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up. Acquisitions would kind of just be a cherry on top of the Sunday
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and basically just add to what obviously is very right picture ahead. Well,
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I appreciate your both coming on and discussing Prespera. If you want to find
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out more information, just go over to Prespera energy dot com and make sure
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you sign up for notifications so you can get the latest information as Sam executes
23:49
the plan. The ticker symbols g xr FF that's in the US, in
23:56
Canada, Pei, Sam Jabam, thank you so much for coming on.
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We will definitely be talking to you later on in the summer to get the
24:04
latest updates and wish you both well. I do cheers The Financial Survival Network