Quickstart     Cashflow File     Day     Participation     Other Financiers    Map     Oil Rights     Well Depths     Partnership     Dealmaker

  Shotgun Agreement     Running in the Red     Bankruptcy     Share Price     Corporate Position     Fast Track     Winning

  Leaving the Seminar  Hostile Areas  Subsidies  Joint Ventures  Administrator  Drilling Contractor  Rig Move Cost  Depletion

  Expiry of Rights  JV Leader  JV Drilling Decision    Posting Land    Waiving Extension Fees 

• Costs $100,000 + drilling contractor fees + rig moving cost
• Takes three days to drill
• If successful, provides a cash flow starting at $18,000 per day.
• Cash flow declines at about 2.5% per day. See also depletion.
• If an intermediate or deep pool is directly underneath a shallow well, it will go undetected. If you want to drill a deeper well later on the same location, there is no re-entry into the previously drilled shallow well; you must pay the full cost.
• Heterogeneous Geology

Developing Shallow Fields   If you have oil rights near a shallow field, get them developed ASAP. Get your shallow oil working for you so you can start paying for intermediate and deep plays.      The shallow field is actually the "seismic" for the intermediate channel. After the first shallow well is discovered, you have a difficult decision whether to go shallow or go intermediate for the next well in this "shallow" field. Have fun figuring this out!

Intermediate Well

• Costs $200,000 + drilling contractor fees + rig moving cost
• Takes four days to drill
• If successful, provides a cash flow starting at $9,000 per day
• Cash flow declines at about 0.5% per day. See also depletion.
• If the well finds oil at the shallow depth, you get the cash flow of a shallow well. But you still pay the full $200,000
• If a deep pool is directly underneath a shallow well, it will go undetected. If you want to drill a deep well later at the same location, there is no re-entry into a previously drilled intermediate well; you must pay the full amount.
• Channel Geology

Developing Intermediate Fields Look beyond the adjacent possibilities for intermediate wells. Extrapolate the path of the intermediate play and try to bring these locations into the deal. The intermediate field is also the "seismic" for deep pools, so try to tie some of the possible deep locations into an intermediate/deep joint venture.

Deep Well

• Costs $400,000 + drilling contractor fees + rig moving cost
• Takes five days to drill
• If successful, provides a cash flow starting at $27,000 per day.
• Cash flow declines at about 1.5% per day. See also depletion.
• If the well finds oil at the shallow or intermediate depths, you get the appropriate cash flow. But you still pay the full amount.
• Homogenous Geology

Developing Deep Fields Deep fields have both risky wells and "sure thing" wells. A sound financial plan is to bring the wildcat, stepouts, and "sure things" into one deal. Otherwise someone gets to be a free rider―or maybe the field sits undiscovered.   Forming a joint venture with a block of possible deep locations is good strategy.

All wells produce cash flow until the end of the seminar.

See also: The Hostile Regions

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