Re: Insiders Options - ROR
in response to
by
posted on
Jun 06, 2008 05:06AM
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All decisions in the O&G industry have a rate of return question attached. First can we get the well to payout, then what is the ROR?
Wells #3,4,5, and #6 have a $1 mil drilling and completion cost, each. Add that to the $9 mil for well #2, and we have $13 mil that has to earn come back to those putting the money on the table, or why keep on drilling? Add to that 20 more shallow wells, and 2 deep wells. Assuming that everyone is smarter, and the deep wells only cost $5 mil, then the total, for future wells is $31 million. The decision to spend that money has already been approved.
Are they incredibly dumb, or have they found an elephant(s)?
Sunseeker, I think you'll have a big enough return on your investment to pay for lots of sunny vacations.