This lease is called the Cobb-Reilly (Reeves is adjacent lease) and it is 4 miles from my shop and I have been working since 2014. I have drilled a few wells on the property along with producing some older wells that were already on the property. These wells were drilled mainly in the mid 50’s and they are still making oil. This is my benchmark for longevity in this field. When asked “how long do I think the wells will last” I reply that the others were drilled in 1958. I could spend 10’s of thousands of dollars and get a fancy geological report to tell me what I already know.
Last year I started producing one of these older wells and was making some serious oil out of it before the old equipment in the hole fell in and the well bore was lost. I worked to retrieve the old equipment and save it, but ultimately it was cost prohibitive to continue. This is actually good news, I got a free peek at what that well is capable of. That well was called the Cobb #1, we are going to drill the Cobb #2A.
Original Cobb Well
Each unit will own 2% for $10,000 the following cash flows are based on that.
40 barrels per day X $55 oil price X 30 days X 2% = $1,320 per month or $15,840 per year or $316,800 over a 20 year period
60 barrels per day X $55 oil price X 30 days X 2% = $1,980 per month or $23,760 per year or $475,200 over a 20 year period
100 barrels per day X $55 oil price X 30 days X 2% = $3,300 per month or $39,600 per year or $762,000 over a 20 year period
When oil prices go up again scenarios
40 barrels per day X $65 oil price X 30 days X 2% = $1,560 per month or $18,720 per year or $374,400 over a 20 year period
60 barrels per day X $75 oil price X 30 days X 2% = $2,700 per month or $32,400 per year or $648,000 over a 20 year period
100 barrels per day X $85 oil price X 30 days X 2% = $5,100 per month or $61,200 per year or $1,224,000 over a 20 year period