Prosperous, increasing production, reducing costs. We're actually cutting the Phase two Alfair
development plan. It's on track. The weather conditions just something we cannot control,
but we are getting a little more having a better understanding. I think
it a budget that reduction into a production forecast. The Financial Survival Network now
more than ever, the Financial Survival Network. And welcome. This is Financial
Survival Network. I'm your host, Carrie Letts, and we are getting an
update to date, a long awaited one that I've anxiously been seeking on Prosperit
Energy. When we last connected with CEO Samuel David and White Tundras, shebam
guard it was the dead of winter, and I know that in the in
Canada, in Alberta and Saskatchewan, winter has a whole different meaning that it
does in Laurida, for sure. And Sam, I know you've had a
couple of exciting plane rides, but you're here to talk about it. Chapin,
We're great to have you back as well. Sep. I guess we
should get to the meat of it as production going in Prospero now. Sure,
good to see you all back in Canada. You're right, the winters
in Saskatchewan especially in the berries. You know, it could be rather chilled
and rather cold, and it can get into minus fifty degrees where even oil
starts freezing in the pipeline going through that experienced last winter, I had to
amplified to exposed the infrastructure that needed attention and also other resources, the personnel
as well to attend to the exciting capital projects that we have lined up for
the warmer months. So prosper I took a step back and ten ensure the
infrastructure and the resources, the personnel, resources and the monitoring system are in
place to accommodate the appreciation of production and the capital project development projects that we
have lined up for the summer months. And we have done just that.
There's a lot of gas handling issues, compressors, sweetener to ensure that gas
is not sour and spoiling the engine and we're not doing emitting sour gas.
These kind of things needed update. We needed to ensure the pipelines can handle
the pressure. We need to ensure the injectors are by in place as we
wrapped up the production to accommodate the injection rates and the volumes that we see
from the appreciation of production and increasing the volume and we've been working on that.
That has been a focus. So as we have i mean to the
conclusion of that, and we're still working on it. The production has been
slowly ramping up as as you know them. Back in the winter we actually
shut down the battery so that you know, pipelines do not break and spill
and cost spill. Now we're getting closer to back to that volume up close
two thousand barrels a day in the weeks that we're speaking and you know gas
associated with it, probably another one hundred and fifty bows and two buis.
But into the summer it's got into the month will be a little past than
what we attained before. We're hoping to obtain closer to twelve fifty barrels a
day, closer to fifteen hundred buwees at eight and we're end of the month.
As we're doing is we're also getting prepping all our capital development projects,
which is the Brooks Field. You know, we're medium light oil tested favorably
at hundred barrels and three hundred barrels a day, and we've been we have
delineated the pools geologically and seismically because we have three d s eyes make and
we're very excited to drill eight additional wells from one pad, uh you know
the pad that we're going to eye in the well that we just tested.
We're going to drill another three more wells. So the surface there was only
one single surface and centralized battery that is underworks right now pilot licensing and you
know, surveying and least prep and everything, and we're hoping to start commends
that drilling about eight weelve program in June in amount of the first few weeks
of June. Similarly, the horizontal development that we padded it last year,
the one well has tested is continues to produce. We haven't fully drawn on
it. And when you look at the production, I mean it's doing sixty
barrels or any barrels a day. There's a lot of food levels in the
World War. But we're not going to just ramp up and pull in the
water. But it shows the indication the capability of that well and the other
well, second well that we piloted, we did had to plug back because
of the gas we encountered. The gas was persist stan couldn't you kill it
in one way? It was not a good thing because we didn't have the
control of the wall. In another sense, we got reserves. We got
gas reserves from that zone. So those two pilots, you gotta remember,
pilots are men to understand the reservoir, so it could set up the development
program. So we don't want to go into development program not knowing what we're
going to encounter. So we have those pilots and tweaked us technically that being
a built section, we have to have a control of the well. And
he had to do that using a re entry. You need a commercial horizontal
and as it is in the later role, it's depleted reservoir, so there's
going to be lost of circulation. You want to be in full control of
the well and dissipating that I could be lost a circulation. It cannot be
playing around with the building section. These pilots pilot wells helped us to understand
and stage this ten well program that it's commencing also in January. Are in
June and the first speak up, so we have a good healthy capital program.
Medium light oil corisanto ones combine. These two ip could be anywhere in
the fifteen hundred barrels range. But you know we a conservative, we say
we should be able to add a thousand barrels if you execute all of this
over the summer months. Where are we going to incur less costs because we're
not drilling in the winter ones and we can also bring these wells online.
So that's into this month, we expect to be twelve hundred and fifteen barrels
a day. You know, with gas, we could be fifteen hundred boes
in over June, July, August, we should be a September gradding that
executing that capital program, who should be adding thousand plus barrels a day,
So that's a gas It's possible then that you could see before the end of
the year doubling of production. Though I always hate to commit these, you
know, these winters. That seems to kick my ass. So I you
know, one of the directors, you know, Brand mccadoll, who who
knows the scotchewn really well, go Sam always you know, be conservative.
Uh and and decreased by twenty percent in the winter accommodated for the winter reduction.
So yes, where we you know, to answer your question, yes,
I cannot tell you exactly where you're going to be, but there's specially
addition, this this year is a transition year where we were struggling to just
break even. Now we're going to be well passed breaking and be profitable and
also eliminate all the legacy arrears by end of this year. So profitability,
and you know, we continues to reduce our our r O LMR program and
I reduced the surface the you know, the footprint on the on the surface.
Uh. And these these costs going to start reflecting, you know,
a little bit this year, but more so towards the next year. So
prosperous, increasing production, reducing costs. We're executing the Phase two offer a
development plan. It's on track. The weather conditions just something we cannot control,
but we are getting a little bit more having a better understanding. I
mean, you budget that reduction into a production forecast. Okay, great,
So Chavam from your perspective as a strategic investor, Sam's pretty much executing the
plan, right Yeah, yeah, Bet, I think this is what we
were looking for is this is a company was coming out of this this legacy
arrears. They had a lot of wells to abandon. There was a lot
of suspended wells infrastructure that had not been maintained by the previous management team.
Things were just left kind of to decay. You can look about it if
you just look at the Prospira corporate presentation, would the previous production how it
was dropping coming into twenty nineteen and twenty twenty. So I think Simon the
team have done an exceptional job getting through that. As he mentioned, twenty
twenty two was more of a pilot year. We drove the two side tracks
in which basically we went into an existing world war and went horizontally, which
carries a little bit more a little bit more risk. It is cheaper,
but you do carry more risk that the world war is unstable, you could
get lost circulation, you could get gas kicks come out of that. You
don't already have as much control. So we had those two pilots last year.
And then of course the Brooks property was also acquired last year, and
now the company has the money through our private placement, through the calf flow
they've been generating, and then through the recently completed well partially completed debt finance
and arrangement. The company now has the money to go and really execute on
the plan. As time goes on in and I think I've always said this,
whether it's with Prospera, whether it's but my other investments, is there
has been a step change in technology in some of these heavier oil fields and
even some of the media light oil fields over the last decade. But the
problem is companies never really have the money to do anything from twenty two d
onwards. Some of these assets got stock in some of these junior companies,
or they were not taken care of in some of the bigger companies. And
now that we're here ten years later, we have better, better geosting technologies,
we have better well control, we have better curse, we have just
longer laterals we can drill. And I'm looking forward to the summer drilling program
here. And I think one of the points that Sam hit on that's that's
really key is when you look at well results of heavier oil wells such as
the cutbolt of Cuthbird and loose Land and heart sill horizontals. We don't produce
these wells like it's like a motney well or shale well where we jack up
production and then we let it drop. These wells are aren't more for a
reservoir science. There's more reservoir management and reservo engineering, which means you let
your fluid levels stay high, you slowly speed up the pump to bring those
down. You don't want to get sand in flux, you don't want to
get the water taping in. You really want to produce them in a very
stable manner. And that's what makes these well so fantastic. In my opinion
as a strategic investor, is I don't get that decline rate. If my
will is making thickty barrels today, it may make forty eight barrels filve months
from now, it may make forty five barrels three years from now, because
all we're doing is drawing down that fluid level as opposed to losing d reveser
ward pressure, which is out of the the overy problem in unconventional wells.
And really company stopper declines nod stop, whereas this is more of a building
a company step by step by step. And that's really why we invested Urine.
Looking forward to the eighteen World Summer program here up college really going.
And I add to that, Well said, you know, reservoir management is
key in these uh in these heavy oil reservoir because relative permeability, uh,
you know comes into play where you know, lighter food. He's gonna if
you drove, if you spend your our pump faster, you're gonna have higher
draw down and lighter fluids gas and water, it's gonna superseded or heavier.
Well. Now, this our method has been substantiated by Insight, a third
party who will evaluated us. They gave us a two p reserve of one
hundred thousand barrels of recovery by this pilot well you know, by the way,
were also it gave us a couple of million barrels of HUDs and developed
reserves that we you know for the forsulsos that we go into the drill.
So it has been substantiated in our method and it's recognized it can add reserves
and production. Now in addition to that, we've already looking into polotating it
to pressure support this reservoir with the viscous fluid and we're fairly close to that
and that's also going to be piloted this summer. Now, once that has
been substantiated. By the result, these wells can have a PD proven developed
reserves in the order of two hundred thousand or three hund barrels a day barrels
reserves and it'll recognize this additional, this substantial see significant remaining reserves can be
actually recognized as proven reserves, and that will elevate the value of the company
to other level. And as you know, you know, every year we've
been elevating our IMPV value and reserves. We increase our reserves by fifteen three
percent in twenty twenty two. I expect to even actually hire increase in the
upcoming year because of all the reserves on the horizontals and Brooks whiles that were
adding. So Prosperita is in the works of recognizing or proving that significant remaining
reserves. Technical application and results right, and so one thing when you're when
you've got these long life wells, and then your cost of maintaining production also
goes way lower. You don't have to do recompletions and all these other techniques
to keep the well producing. Right, when we sustain that lower draw down,
we supported with pressure support, a proper pressure support. You're maintaining a
piston, you can get your decline now to you know, even five to
ten percent less than ten percent when you're maintaining that it's only maintenance costs that
you're going to occur as we complete our LMR program a three year program.
We're in our second year. Yes, then the fixed operating cost that will
be reduced, and you you have steady stream of volume of barrels every month.
Price. We cannot control our costs and volume with your control and that
is prosperious focus. So SBAM, you know, as much as this is
a production story, because by the end of the year we could be fiftyfold,
production could be up fiftyfold from where Sam took it over, it's also
a cost cutting and a technology story, right, Yeah, certainly. I
think this is one of the things that's maybe missed in some of the growth
companies. People will go into it and they will look at the financials and
say, well, hang on, this company's break even is just way too
high. We can did best of this. But what they're missing is as
the company's production grows, your operating cost per barrel comes down significantly. Some
of these assets that Perspira owns, they used to run ten, fifteen,
twenty thousand barrels of fluids through them. The infrastructure already placed, the pipelines
have already placed, the compressions already placed, and as we increase production,
your your fixed costs the same on operating this equipment, and then your variable
cost per barrel keeps coming down, and therefore we get a double weam effect
where not only is production increasing, but your production cost per barrel then decreases.
So there's definitely a story there on the operating cost per barrel bringing our
net back a lot higher. And the technology. I think the technology.
When you have a field that has total combined four hundred plus million barrels in
place, you have a seventy eight nine percent recovery factor that to me tells
me, okay, I've got three hundred and sixty five million barrels still in
place. And as kind of I mentioned I alluded to earlier, there are
technologies in the last by seving ten years that have come up which made these
types of fields very attractive, whether it is with NEO orzon't drilling, whether
it is with the upgrading up the oil that comes out of the ground,
and even some of be a polymer bloods, which I'm very excited not it's
hardly sure where we are in that process, but I think this fields,
these fields are very conducive through some sort of higher viscosity fluid coming in and
helping a push that oil. We've seen very very successful palmer floods in saskatchework
already in very similar reservoirs, including one that's just to the east of the
Prospira Cuthbert a cupbird Field, And there's very good fax credits and royalty credits
for putting these procedures in place. The governments are pushing or more recovery because
they end up getting more voyes from these recovery. So there are very very
strong government programs in place where companies can increase production and partly paid for by
the government, which then less a reduced the operating cost and increase barrels and
produce a lot more of this owner of the draught. I think the main
point though, is you have to have reservoirs with oil in the ground.
If somebody's telling you you can do this on a reservoir with a couple of
million barrels left in place at a forty percent recovery factor, not exactly true
when you have four hundred million barrels in place with at eight point five or
nine percent recovery factor. Now That gets me excited. And I think that's
that's really the story we're betting on here. And as some of the technologies
are are being implemented and iterated as we speak, the pilot is not what
it could be your best, most effective way of producing the reservoir. That
is just a pilot. It gives you more information, It lets you delineate
the reservoir unlets you get some information on the pressure i'll the reservoirs behaving,
and then you keep iterating that process to get better and better and better.
And this is just year one, sim said, And and we're now offer
the races with the multi well drilling program without increasing our liabilities, without increasing
any surface pod exposure. And I think is really setting the stage up.
I think I said this on a previous podcast Prosperities. Now in the escape
velocity out of Earth and and once again into low orbit, it's a lot
easier to get into high orbit from there. It's just the way of physics
and science works than it applies to reservoirs as well. To carry that analogy,
you know, it's like Elon Musk shooting a rocket up in the air
and not expecting it to go up, but learning from how it went up
and how the flight took place so that future successes will no doubt in Herr
and Sam So acquisitions obviously made a few along the way. And there's it's
kind of a wide opening space there in your areas. What are you without
giving away the show, what do you forest see for the rest of the
year. Before I get into the acquisitions, I get a comment on two
things about and rocket and orbit and all that stuff. I'm just a simple,
you know, a simple silly immigrant to that's just trying to do things,
you know, realistically and economically. You know, I don't know about
all of that. Uh. And the second thing uh, Suban mentioned about
I'm not sure where we're at with the polymer flood and and you are recovery.
I'll just give you a quick update on that polymer flood. We have
noticed analogy. We have been looking at all the nearby adjacent producers flying polymer
and they're getting some good results. We've been looking at all the technical parameters,
the viscosity and comparable and what we can do and what we have in
our on our end. And there's been a couple of technical engineers I've been
working on it, and we also noticed polymer flood could be very capital intensive
if you go on a megascale at a battery level, blenders and things like
that, So we were planning to divide that into smaller pieces and do it
individual wells, and maybe perhaps look a look at liquid polymer as well,
so that it's not in a megascale and you mounted investing in millions and millions
of dollars at the battery and then you're putting all types of pipelines distributed at
maintaining it. We thought we could do a single well injector with a flood
pattern and we kind of fitted in the entire field. That seems to be
very cost effactor. We've been looking at that so that throw infrastructure. We're
doing that and actually, you know, a place like loose Land, if
that starts working, we don't need to drill horizontals. We can just use
the existing vertical and this we've been properly. You know, that reduces a
lot of capital. Also, there's another technology which is very interesting, is
nano technology, and we've been looking at it too, so I think there
might be a possibility there and we're progressing on both. We might pile it
both in a loose light field. Some of it maybe in a better API
and might work, you know, some of them maybe works better and higher
lower API. But both of them's going to be pilot over in this summer
and we're fairly close. We're on the sixty seventy percent range here. But
you know, Prospera does a lot of pre planning, a lot of development.
We look at all the technical parameters, will do some lab testing and
see how it's going to work. We ensure that the injector as a connectivity
to the peripheral wealth by do an injectivity die test and things like that,
looking at it geologically and seismically. So we reservo our management for longibility is
how Prosperity takes its approach, and surely it is not really capital intensive around
spending a lot of money getting permits and construction and deserving the environment using what
we have. We didn't want to Seeing the kind of the environmental footprint is
one of the objective with the ESG initiatives. So along that same path,
you mentioned that acquisition oswere has some criteria and corporate criteria. How we look
at our acquisition, we like to expand in the core area of similar so
we can utilize local community services that we have already established. We're not going
to go too far from various part of the provinces. That's going to incur
a lot of additional channeling costs and setting up course area. Brooks is nearby
Calgary and it's actually on the way to Saskatchewan where our assets are, so
it's convenient for our staff to go to the field, you know, to
go to either field. We might not look at that, but it's very
convenient for us to go and monitor and interact and operators to come here.
It creates good collaborative work environment. We are looking at expanding the current area
LR has gone up. We can accommodate liability without paying money, and that's
the first acquisition and on look at. But it does require development that can
expand our oil in place to another level and continue to increase production because it's
more are the same optimization potential. Maybe if I mutter to six soundred thousand
brows a day and then get into the same retire a lot of these verticals
and new horizontals, and that is in play and I'm hoping to complete that
by quarter of two room my end of quarter two, well, you've got
a lot of things going on and more importantly moving ahead. Production is going
up. Acquisitions would kind of just be a cherry on top of the Sunday
and basically just add to what obviously is very right picture ahead. Well,
I appreciate your both coming on and discussing Prespera. If you want to find
out more information, just go over to Prespera energy dot com and make sure
you sign up for notifications so you can get the latest information as Sam executes
the plan. The ticker symbols g xr FF that's in the US, in
Canada, Pei, Sam Jabam, thank you so much for coming on.
We will definitely be talking to you later on in the summer to get the
latest updates and wish you both well. I do cheers The Financial Survival Network