ADL, I had the exact same thoughts, so I contacted RLE. The line that got me suss was "Real Energy will continue to evolve its extraction techniques". To me, that was code for 'the wells aren't performing as expected and cap raise. I put this to RLE and the answer was a definite "we meant what we meant". So there's nothing up with the current wells, they were just confirming that this play will evolve and they should be able to improve results over time.
Why the change of due date for flow rate results? Onsite RLE reps advised the board of the progress in recovering frac fluids from T2 & T3. T2 is all but recovered (~90%) whereas T2 is >50% so far. The shut in, pressure build and flow test will take ~2 weeks to complete. There was a risk this 2 week timeframe would put RLE too close to Xmas. So RLE made the call to delay the testing until the new year. Fair enough i say, i would rather be with my family on Xmas day than on a rig in Windorah.
I expect both wells will be shut in before Xmas.
Why 2 weeks for flow testing? 2 weeks will provide enough data for consultants to predict well decline and estimate reserves! RLE expect a 'long' well life based on productivity data from nearby Santos wells. Flow rates are important but each well needs enough ultimate recovery for payback. RLE seemed very confident of this.
What does "both wells are performing better than T1" mean? T1 has 'slugs' of formation water that inhibit continuous flow. T2 & T3 whilst recovering frac fluids are performing with far greater consistency. 'Slugs' of frac fluid (only) appear but are nothing like T1. The flow rates from T1 when not affected by water are solid, so i expect that T2 & T3 without these issues should flow consistently and at a higher rate.
Interestingly, RLE mentioned that re-conditioning T1 was a future option to improve the well. That to me further shows that the gas is good and its a well completion issue that has hindered T1.
Testing of liquid recovered from T2 & T3 has been completed and did not indicate the presence of water issues like T1. RLE did indicate they would continue to conduct testing to confirm the results thus far. This is very good news.
Hopefully we get a few more flare videos and 'business as usual' updates before Xmas. I assume there will be an ann confirming shut in of the wells?
Reserves are expected Q1.
