B-19 reservoir producing water was expected. In comparison to the B-18, water saturation is higher (in B-19). Interesting that Lower B-18 host liquids with minor associated gas and Upper B-18 hosts gas. The B-18 at the #201 location produced gas and liquids, while at the #202 location there is only gas.
If the geological/technical properties are similar at both the 201 and 202 locations, then one can expect 202 to have similar production test results (from the Upper B-18) to 201. 201 was perforated over 7m interval while 202 was perforated over a 5m interval.
The bonus at the 202 location is the liquids content in the lower B-18 reservoir, which will extend the life of the well. Drain the gas, then drain the liquids. It also opens up an opportunity to to develop the Upper B-18 and Lower B-18 separately.
If 202 results are in line with expectations, then the only thing preventing Hawkley from pushing the field into full development is $$$ and access to rigs.
HOG Price at posting:
14.0¢ Sentiment: Buy Disclosure: Held
