The investor presentation has provided the following information on where the 60 (or there abouts) wells will be drilled in this 2011 program. I've decided to do a few calculations on where I see the production being at come the end of December 2011.
Sugarloaf 15.7% (9.5 wells, let's say 9)
Longhorn 31.9% (30 wells)
Ipanema 36.4% (0.5 wells, let's say 0)
Excelsior 9.1% (20 wells)
In order (net wells): 1.413 + 9.57 + 0 + 1.82 = 12.8 Gross producing wells.
Let's say a 10% decline rate per 30 day period, starting from the initial production rate. The most recent well, Franke-1H declined about 12% in it's first 30 days and Turnbull-4H actually had a higher 30 day average than it's initial production, most likely due to Hilcorp gradually 'loosening' the choke setting. Overall, personally I feel 10% would be an accurate estimation considering how well AUT's declines have been performing, especially in recent times.
Please remember that in our recent wells, Hilcorp have been using highly restricted choke settings, and gradually loosening the choke over the first few days I believe, hence just like Turnbull-4H, the actual initial production could well be less than the 10 day production average. So for those who think 10% declines are optimistic, then I urge you to consider the above statement.
Using the latest investor presentation, the IP average from the 17 wells we have information from (9 Sugarloaf, 4 Longhorn, 2 Ipanema), the presentation states the average oil production is 827 barrels per day + the average gas production is 3.01 mmcf/d.
6:1 Ratio = 1329 boep/d
12:1 Ratio = 1078 boep/d
I'll personally use the 12:1 ratio, as it's more accurate for the actual condensate/gas equivalent. We've learnt in the last few days that 6:1 is now used as a North American Industry benchmark, however I don't think it's realistic just yet. If I used the 6:1 ratio figure's stated below would have been higher.
Since some wells drilled this year will experience up to 12 months of declines and some wells will experience 0 months of declines along with the fact that wells are constantly being drilled every week or there abouts, on average each well would experience 6 months worth of declines.
1078 (average IP) *0.9 (less 10% decline)^6 (0.9 to the power of 6 because the 10% declines will be experienced, on average, for 6 x 30 day periods).
That comes out as 572.9 boep/d (12:1) for the average production per gross well drilled in the 2011 program, at December 31 2011.
572.9 * 12.8 = 7333 boep/d
Add on the wells from this year (which are currently producing a total of 1400 boep/d at 12:1) and let's say they'll decline to 700 boep/d total by the end of 2011.
That's 8,000 boep/d, and that's what I'll be looking for come December 31, 2011.
Make of them what you will, that's just how I see things