Hard to tell. Obviously it's not good if they are seeing fractures infilled with minerals but drill cuttings don't really give enough info to tell the degree of infill, because they are smashed up.
It doesn't sound great so far, but they've only gone a small way through the horizontal leg, and horizontal wells take advantage of lateral heterogeneity in the reservoir. You often only need to intersect a comparatively small section of good reservoir to have a successful well.
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