Twenty twenty two, MPB was valued at seventy two million dollars. Since then,
we're adding nearly thousand bus to day ten horizontals and Brooks development. It
should have some reasonably significant impact on the reserve evaluation of the company and the
NPB of the two p MPB of the company. The Financial Survival Network now
more than network, the Financial Survival Network. Welcome. This is Financial Survival
Network. I'm your host, Kerrie Lutz. And hey, we're in the
first week of December. We're getting an update from Prospera, you know,
one of my largest holdings websites prosper Energy dot com, the symbols and the
US g xr FF and in Canada of course Pei. Right now with me
is CEO Samuel David and CFO Chris Ludkey. Gentlemen, I know it's snowing
on this Friday, but you guys from our neighbors up north, nothing you're
not used to. Actually, it's uh. First of all, I carry
already doing. First of all, I think it's nice having some snowflakes on
the ground. It gives us that Christmas feeling in spirit. It's its this
this season, so so and last winter though, we didn't get that Christmas
feeling because effectively the weather was so bad and due to circumstances you weren't prepared
for, you know, field shut down. But this winter is going to
be a different story, isn't it. It keeps us on our toes all
the time, that's for sure. That's Canadian weather, Calgary weather for you.
So, so Sam, can you give us a production update as of
now where we stand. Certainly, as you know, we're continue to do
our horizontal transformation and the rig is drilling I think it's drilling the eighth horizontal
right now. And while we're drilling, as I mentioned before, we shut
off all the adjacent production and because it's a very poorest permeable sand, we
actually shut down the entire pool for production. So there's about four hundred somewhat
barrels that's shut in for the drilling, and also the new horizontals that we
drilled also has to be shut in for the adjacent adjacent production. Adjacent horizontals
that we're drilled is also shut in and they're all being to come on as
we're getting to the near end of our drilling in that location. So there's
about closer to six hundred seven hundred barrels per day bueis per day shut in.
Our production currently is about thousand bue's mostly barrels. It's thousand barrels a
day, and we have all six hundred hundred barrels shut in. We're also
bringing on Brooks at the moment. As a matter of fact, as we
speak, we've finished our first well. We have prifted did our as a
job and it looks as expected might exceed their expectation. We're also tying in
another well in Brooks as well, so all that leads to that we are
getting more and more confident. We exit as anticipated at the production rate of
eighteen hundred bu week a day and could theoretically be higher as far as the
flow rates. So these new horizontal wells, last time we spoke, you
mentioned that it exceeded your initial forecast. Is that still holding true? Pleasantly,
The pumps are operating at its lowest speed and efficiency because we don't want
to exert a huge draw on the reservoir and it's been holding the water cut
mostly it's a ninety nine percent oil cut, and now we're beinging to optimize
more. The indication is we are draining undrained reserves that were tapped in by
the ridicule wells, and that gives the fair amount of confident on the oil
in place and a significant reserve add to the year end reserve evaluation. Consequently,
the NPV value of the company twenty twenty two in PB was valued at
seventy two million dollars. Since then we're adding nearly thousand bus a day,
ten horizontals and brooks development. It should have some reasonably significant impact on the
reserve evaluation of the company and the NPB of the two p mpve of the
county. If my memory sertas make correct, you're getting over one hundred barrels
per horizontal well that you're drilling. Is that number I showed in the chart
there anything over around five hundred meters of latter pay we were getting hundred,
one hundred and ten barrels per day well. It makes my limited potential for
math a lot easier because however many wells you eventually drill, I just multiplied
times one hundred, and I get your expected to flow rate there, right.
I certainly hope to maintain that about those results. So press as far
as Pei's financials go before Zam mentioned or you mentioned break even of somewhere around
five hundred barrels per day. You're keeping a lid on cost. Is that
pretty consistent? Yeah, certainly carry and you know with the press have falling
off a little bit since I think we were lost on the show. You
know, we see break even maybe around six hundred barrels a day gross this
ten seconds with seventy seventy five dollars WTI and the heavy delaight oil differential where
it sits currently. However, with the additional volume coming online through the end
of the year, we're obviously seeing our fixed costs reduced on a per barrel
basis, and so that number is coming down with the additional barrels that we're
producing. So happy to see the increases here, which means your margin's going
up and your netback goes up. Right, Yeah, that's correct, Yeah,
all right. And as far as the drill program going ahead, for
however many wills eventually get drilled, company is going to be able to pay
for this, that's right, Yeah, that's right. So we've we're finance
to be able to execute the rest of the horizontal program we recently announced some
news earlier on where we talked about debt and gore financing roughly about three and
a half million dollars. All of those proceeds are going directly into the ground
to be able to support the drilling program. All right, So from last
year twenty twenty two to the end of twenty twenty three, can you just
contrast the financial position of the company now as opposed to a year ago.
Yeah, certainly. I mean, I think we've seen a lot of our
legacy debt being paid off, so we've seen reductions across the board with some
of the payables that were inherent when there was a change over from the old
management team, we're seeing we've seen the end of some of those payment plans.
So we made our final payments in November for some of the twenty four
month payment plans that we worked on with vendors. But I think overall,
Kerry, the company is poised really to start to move ahead based on these
incremental barrels and the additional cost flow that the debt's associated with it. That's
always good news. So, Sam, we last spoke, you mentioned that
cost drilling cost per Well, we're coming in fifteen percent below your expectations.
Is that still running consistent with that in a perudit basis, because, as
I mentioned, the lateral five hundred meters plus as giving us ip in one
hundred plus barrels per day. So the next group of wells that we have
commenced, we're targeting around six hundred meters and seven hundred meters of lateral pay.
Technically we can extendard laterals to those length and the first one we drilled,
I think it was five hundred and forty or something plus the second one
now we're in a six hundred meters plus. So the costs is corresponding to
the time. But you know, the savings has been under budget so far.
Yes, borrowing from any technical challenge that we might incur, which which
which always happens, because it's not just you know, cheese that you're cutting
through. It's there's heterogeneity in the reservoir and there's different things to be encounter
and that's fine. You know, I would say it's an efficient operation,
right, So effectively, based on the numbers you mentioned last time, it's
almost as if every seventh well you drill is for free. Well, I
suppose you can look at it that way. Yes, right, so hey,
acquisitions, we've heard mention of them. I realize you can't get too
deeply in the weeds here for obvious reasons, but they're moving ahead that part
of our business strategy. I'm getting more and more excited about it because as
we have gone into our development program and then our horizontal transformation, we've done
a number of wells now and now you could say it's repeatability and the same
thing with the light oil development. We have encountered pay initial production tests as
anticipated, so that horizontal development plan is proceeding according to the plan, and
now we are able to focus on the other development to appreciate prosper through acquisitions.
So now I get to spend a little bit more time in accelerating these
acquisitions. There's one other point that I must add that allows me to do
this. We hired a very experienced individual that has a lot of working knowledge
in this area as VP of Operations, John McMahon, and this allows me
to free myself a little bit from our hands on operation to focus on an
acquisition. As as a result, we have about five acquisitions in play right
now. The corporate strategy that we have that we try to hit properties that
are in distress and it's in primary depletion and it hasn't been totally optimized.
And we look for light oil to complement our heavy oil dependency, and there's
a number of them. They're all moving ahead, and I'm really hoping and
pushing to complete all of that for quarter one. They're they're going into OI
and it's because now now I have some uh, there's some time I can
focus on this and things are moving ahead, and I think I don't know
if I'd be brave enough to mention, but you know, there's US acquisitions
involved because there if we see some synergy. So this is the first time
I'm alluding to something like that. It's not to change the focus, but
the US audience are very aware of Prospero Energy and we've been we've been getting
fair line interest in Prospera to combine with Prospera. So there's a number of
things that's moving ahead carry and I think I can expand a little bit more
in that latter part of January. Excellent excellent news. Well, I guess
there's two places to drill for boil. One is in the fields and the
others in the financial markets. And if you can get a good deal on
it, why not. So, Chris, these acquisitions that Sam's alluding to,
they would be accreative in nature. They wouldn't be diluted with it.
Oh no, certainly a creative. I mean what we're looking at here is
each and every one of the acquisitions that Sam mentioned are roughly about ten thousand
per flowing barrel to be able to add to Prospera. And you know,
some of the peers that we spire to look like and even there, you
know, in the future here all very valued in the thirty to forty thousand
dollars per fol flowing barrel. So you can see the you know, three
or four times upside just just on that basic math. So really, I
would almost liken the Prospera to the potential of a roll up to be able
to take all these undervalued barrels, bring them into Prospera, and then revalue
them at a higher flowing barrels. Correct. Yeah, Yeah, And that's
that's what our team is set up to be able to do, is to
be able to take these distressed assets, these undervalued assets, and be able
to recognize the true value behind them. But you know, that's not the
only way we'd like to appreciate just and it doesn't make sense, you know,
just revalue them. But we're not going to just do that. We
are looking at these properties because we know there's reserves and we can optimize them.
So we will supplement and support it with whatever barrels it came. We
will optimize that barrels one to one or more, you know, and then
we'll get into reservoir mannauncement. So I think the appreciation and production will foster
the reevaluation, right, Yeah, So it's not just a question of taking
the asset putting it on the books. It's adding value to it at the
very same time by increasing your flow rate, increasing recoveries, and cutting costs
as well. I would presume producing our cost environmental footprint, you know,
applying latest technology and some good reservoir management that most companies are most reservoir has
not been applied to all Right, Well, I think we got a really
good insight into what's going on with the company. Now it's moving forward.
You know, this time of year, things kind of feel like they grind
to a halt or they slow down. But it sounds like in Prospero's case,
that's hardly the case. So again, go to the website, sign
up for notifications prosperit Energy dot com, ticker symbols us g x r FF
and in Canada of course Pei. Gentlemen, best wishes for the holiday season.
We'll touch base after the first of the year. Thanks so much,
thank you, and Prospera wishes all the shareholders and stakeholders and everyone that's interested
in Prospera a very very safe merry Christmas and happy holidays. All right,
thank you, all right, take care, Thank you, Gerrit. We'll
talk to you soon. The Financial Survival Network