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Prospera Energy Finds More Oil Than Expected · Financial Survival Network

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We're getting average around eighty five dollars Canadian and our op cost has been every
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year we've been releasing. It was, like I said, it was sixty
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dollars a barrow when we took sixty plus and we got it down to thirty
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eight. Now we're getting down to thirty three. And these are additional wells
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that's contributing to the fixed costs, so it's even lowering the costs. So
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our netback is anywhere forty fifty dollars. The Financial Survival Network now more than
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ever, the Financial Survival Network, And welcome. This is Financial Survival Network.
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I'm your host, Carrie Lutz, and they've gotten a lot of requests
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from you out there. Please please please give us an update on Prospero Energy.
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Well, we're going to do better than that. We're going to talk
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to the CEO, Samuel David. We're going to give you an update on
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the drill program, the success to date five for five wells, increased production.
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It's really a story of a turnaround that's coming to fruition with increased production
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and the higher profits. Right around the corner, Saam, It's great to
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see you again. Hey, So we're doing the horizontal wells. You've drilled
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five of them, you're five for five. What are the results tangibly,
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What can we look forward to in terms of increased production. Thank you for
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reaching out for an update, and Prosperus is happy to convey what we have
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encountered. As you mentioned, we have drilled five horizontals and infield drilling based
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on geological delineation, well control and seismic delineation, and therefore the chance of
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success of geological finding the reservoir is high. You know, the only a
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risk is mechanical because this is infill low risk drilling, and that we tweaked
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it by drilling couple of pilot wells prior to embarking on this development program.
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That we have the drilled five wells. So as for all this tweaking,
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these wells encountered pay structure and oil as we expected, and also we came
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in under budget by about fifteen percent, and I think we can even tweak
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that a little bit more as we extend the drilling. I'm going to share
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a screen and show you the results that we have in the first few months
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of productions. So here's the type curve that we used before embarking on the
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development program for economics. And here are the results that we have encountered.
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The production initial ips in the first two months, we have two months of
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steady production effected was going up. And also there's a lot of room for
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optimization on these wells because they're being held back. There's still twenty five joints
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of fluid and the pump is just operating at a very low efficiency because we
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don't want to exert high high draw do on on the reservoir. On the
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heavy oil, with the heavier oil, with the higher viscosity, it is
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important that you do not exert high drawed on on the reservoir. If you
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do that, it's going to finger the water through the oil and you'll be
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getting more water and then the oil. As you can see, we're drawing
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these down at a very very low efficiency, and yet we're getting some really
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good rates, exceeding our time curve expectations right see, producing more oil than
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you expected. But obviously, from what you're saying, Sam, this is
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a very delicate operation. You don't just march in there and start drilling wells
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without knowing what you're doing. And this reservoir is very porous and permeable.
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There's a lot of well control that we have. So we have placed the
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technical team and the drilling team. They have worked together very well and placing
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the well where we set out to do and then pass, encounter pay and
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it is delivering at the initial stages, exceeding our expectations. Originally, the
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plan called for ten wells to be drilled, and now you're upping that right.
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Let me show you. Because of the results we have encountered and the
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collaboration that we have with our services that we were working with, especially Lasso
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Drilling Company, we have decided to extend our drilling program and continue drilling it
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because we have our inventory of horizontals to drill and this whole field is being
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transformed. Let me show you. Let me show you that I think a
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picture success thousand words. Okay, this is one of the pools that we're
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drilling. And when you're drilling these wells, these horizontals, we have to
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shut in a lot of the adjacent production so that we don't encounter drilling issues
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by the way of loss of mud, because if there's another well that's drying,
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we're drilling here and we're pumping mud it will fly over to. Especially
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in this premium porest Premiere reservoir. Most of the field is shut in prior
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to two or three weeks prior to we start drilling, so the current production
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is all there. We're attaining the results. As I showed you, the
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last five wells that we drilled added an average one hundred barrels a day each
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well. At initial stages. We expected decline later on, but it is
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exceeding our expectations right now. So based on this, we're commencing drilling on
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these well Actually we're going to commence drilling on this location and these wells.
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Strategically we picked it out to set up other horizontals going further. So then
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we have additional horizontals and you can see the whole reservoir is spaced and strategy
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clean placed to optimize recovery, all recovery, not just a certain spot.
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And with horizontals, you're reaching out and accessing additional pay is supposed to just
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one vertical well like this, it only recovers around here. With these horizontals,
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we're accessing the entire reservoir. It will deliver very nice, steady volumes
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over time. And then if you notice there's a color scheme in here.
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The red is the ones we're going to drill right now, and then we're
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going to follow up with other wells. The blue ones are also we're going
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to drill. The blue ones are going to be converted to injectors. You
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know, we will start out as a producer and it will be converted to
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injector so within the next year when the decline starts to come down, we
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have already started in the reservoir management of providing energy and support, and that
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will give us a better sweep efficiency and keep sweeping that oil to the producer
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and at lower the decline. That means the company will have steady stream up
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production, translate the cash flow. And you've got to feel good about this
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because this field and what you're doing now is the reason you took on the
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whole mess in the first place, right exactly. Not only when we drill
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all of these we're abandoning out of these ridical lows that is there. So
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we're reducing the environmental footprint and the associated surface lease costs, liability, and
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the books or retirement obligation. It also lowers the liability and it leads to
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a robust balance sheet r So basically there's a cleanup on Aisle seven. Here.
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You're taking what was really not positive environment there, you're cleaning it up,
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helping the environment, and you're producing energy barrels of oil which will directly
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feed the bottom line and the plan to maintain low decline or reduce the decline.
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So we have city stream up production. Right, So these wells are
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probably going to outlast you and me. Serve life index of these reservoirs is
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around forty years. It's just like I say, if I make it to
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forty, well, I don't want to think about that. You know what
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I'm saying. I did you and I have encountered a few times almost a
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few times now. Yeah, So basically you've been vindicated, your plan,
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your whole reason for doing this. You've proven it. I think it's going
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in the direction as we anticipated the team. You know, what we have
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encountered is what we anticipated, and I think your operation technique and brilling technique
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is bang on, as you can see by the results. Right. Okay,
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so now we go to the vertical wells at Brooks status update there.
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Certainly, as we speak of, finally we got some of the permits and
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licenses and you know, pipeline pipeline license, will license, and we're commencing
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construction next week to set up for drilling. We already have the drilling rig.
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We're still anticipating to meet dollar our targets for the year end. So
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you had hit two wells last year and when you were drilling, but basically
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they were just sitting there because you couldn't hook them in with the pipeline.
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So you're going to be able to do that now, right. Those are
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the pipeline permits that we have obtained, and we also have pained some leases
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to drill and these are new lease and new pipeline, so you know,
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they has to go through the whole process, and the process have become very
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rigorous with all the environmental consideration that is going on. It's been about a
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five month process that we've been encountering and finally we got some of them and
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the others are coming on the way. So the first two wells, you
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know, that's what really excited us. The first well test that one hundred
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barrels a day flowing light oil. The other one tested at three hundred barrels
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a day light oil. I mean that's an initial flush. Production will come
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down, but it is a lot higher than what we anticipated, and we
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have a fair way to run in this area. Out that we got three
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D size make. We have just like what I showed you in the other
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screen on the reservoir. We have delineated it with well controlled geology and size
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make, and we have identified over twenty locations we get We do our best
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to dull our eight eight wells or six sixty eight wells and tie including these
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two tie in wells by the year at that's excellent news. And this is
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medium uh medium medium medium light oil medium light. So now that's the equivalent
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of like twenty four kind of no, it's still some discount. It's about
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twenty four a bi okay, so pretty close, yeah, love SERTs.
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So all right, so production you're foreseeing or forecasting in the near future fifteen
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hundred and then it's going to go up fifteen hundred barrels per day equivalent,
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and it's going to go up from there. Right, our urine target was
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eighteen hundred and we still just obeit to hit that. Right in the first
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five wills, like you said, are producing and drills on site, right
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yes, we we drove them, completed them, tight them in fairly quickly.
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And these additional program that these wells that are commencing as we speak right
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now. You know, there's something release constructed and we're just moving on.
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The rig is just moving on, and we're going to commence production next week
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and we're going to do exactly what we just did. It's all going to
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be what the shake cookie cutter, same same process for each well because they're
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on the existing lease, there's already pipeline, tie it in and carry on.
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Yeah, so so the opportunities there. Hey, I should mention that
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I'm a shareholder, pretty significant shareholder from my perspective, from my finances,
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and you know, I'm been waiting with bated breath for this interview, Sam,
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because you know, the news is good, and obviously the market will
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do what the market does, but at some point when they it's a story
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of consistently increasing production from this point forward, barring weather conditions. And as
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you mentioned market condition, you know, the the reserves are there and we
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were executing them and we're going to continue doing that as arring from these conditions.
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And like you said, you're running fifteen percent under budget, which is
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like unheard of in the oil patch. Usually you're running fifteen to twenty five
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percent above budget. I'm very happy to commit that and that it's it's a
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credit to all those service providers, the technical team, you know, if
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working efficiently and effectively, right, important And that means that you're out in
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the field watching this, making sure that the money isn't flowing someplace else than
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otherwise into the wellhead, right. You know, Western Canadians are happy to
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have this kind of development happening and people are getting back to work and overall
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it's good for a family and the society. Right. Hey, what's the
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netback situation at this point? Netback of what we're getting for our oil.
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Yeah, we're getting average around eighty five dollars canadian. I always talk.
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I know you guys have a Canadian and our opp cost has been every year
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we've been releasing. It was, like I said, it was sixty dollars
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a barrow when we took sixty plus and we got it down to thirty eight.
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Now we're getting down to thirty three. And these are additional that's contributing
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to the fixed costs, so it's even lowering the cost so our netback is
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anywhere forty fifty dollars, which is remarkable. And obviously the less you spend
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developing these wells, then the higher the netback is going to be down the
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road, of course. And also we're retiring another thirty six radical locations that
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reduces our liability. And next summer we got a huge reclamation program to turn
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all of this back to farming lands, reducing an environmental footprint that'll also reduce
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tremendous amount to the bottom line to the op X. Do you anticipate picking
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up the pace of drilling even more as the cash flow starts to mount up.
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Well, sometimes you don't want to outrun the resources you have at hand.
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And also you have to look at the reservoir management as well. There's
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a lot of pre planning goes in here in order to do this. When
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you rush these things, that's when you encounter additional capital costs because you went
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a little too fast. We're maintaining a good pace, and you also have
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to let the reservoir, you know, show us what it can do as
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well. And there's also reservoir management. Perhaps we can go a little faster,
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but then, like I said, you need to hire more people,
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more teams, you know, all of complicated and then all of a sudden,
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you know the process. If the process is good, perhaps a can
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function, but a few the processes it always starts breaking down and the functionality
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and the results starts interiorating. Interesting developments, all on the positive side,
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which is great. I mean, how many companies out there can point to
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revenues going higher and costs going lower. That in itself is a very rare
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situation in this day and age, with inflation and the rapidly increasing prices on
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so many things that we need every day. So that's great to see costs
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h cost going down. And I guess we're going to have a lot more
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to talk about in the not too distant future. So you want to go
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over to cross Sperret energy dot com sign up for notifications so you'll know right
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away for every barrel of production that that gets uh, that gets added,
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which which is really what the story is about. And ticker symbols. In
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Canada it's p e I, in the US it's g x R f F
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he questions comments, you can always send me an email k l at Carrie
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LUTs dot com. Sam, thanks for taking time out from the field.
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Probably you're happy. I know it's cold there now, but I know that
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your heart is always in the field. That's where the action is. The
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financial survival network