Quote:
Originally Posted by Barnes
CP, your my only hope.
Need a little help clarifying some things....
When a company reports BOE/Day, what is it based on?
How is it calculated? Is it daily avg/gas oil used? (6*daily avg gas) + daily avg oil?
What does a company do in the case of a farm in? If they are farmed in on someones land do they report they own 100% of the production or is it reduced based on working interest?
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BOE is calculated using gas(e3m3) and oil(m3) volumes that are converted to BOE. It is usually calculated and tracked as a rolling average of a couple months to a year as too small of a timeline can be affected by turnarounds, pipeline breaks, etc.(this is depending of course on the size of company, wouldn't matter to a company EnCana's size)
Farm in's are when a company asks permission to drill a well on someone else's landholdings. Usually a smaller company on a larger companies land. for ex. tristar farms in on CNRL. Tristar can then drill the well and produce the well till it recovers the cost of drilling plus a percentage(100-300% of drill and complete cost is a normal situation) CNRL would get a royalty while the recovery period is on which would count as an expense agains the "payout" of the well. Once tristars well recovers said cost+, CNRL can elect to participate in the well as a working interest owner, or just keep the royalty going.
If you need a better example pm me.