James Lime Play

James Lime
Introduction
Production Characteristics
Production Decline Curves
Geology
Economics

Economics

Our typical drilling and completion cost is $1.4 million, including land cost. The probability plot shows that there is relatively low risk in making an uneconomic well.

We have constructed a model with the following assumptions:

$1.4 million of up-front cost, inclusive of acid frac cost.
A 1.46 BCFGE Cum over fifteen years.
$30 oil price over the life and $4.25 gas price.
A 75% NRI was assumed, and the James has Texas Severance Tax Exemption status.

This resulted in a well with a 2.3 year payout, generating an additional $3.1 million dollars of undiscounted cash flow. The internal rate of return (IROR) is just under 50%. A cash flow spreadsheet is available if needed (download modest_james_cash.xls).