sp verses sentiment, page-23

hey mick..

i am sure the jvp have applied all that was learned in the previous two wells.

TCEi is operator in these wells, as conocophillips is in the region next door, over there they have drilled 3 horizontal wells, lets look at those wells and compare..

you have to agree that TCEI has thus far drilled both wells to almost completion length.

both were done in one pass, no sidetracks, and the first was not in the zone, it appears they were drilling overbalanced and ended up very deep, and got production off the "other zone" (eagleford,) not bad imho, says to me that they at least found the rock to be hydrocarbon saturated "throughout" the completion.. all thats needed is a frac that will increase the flow off that rock. mini frac was a screenout, second frac was partially in (50%). well flowed at some very uncommercial rates but it has flowed of rock without fractures in it.

second attempt was kowalik. this time underbalanced, water based mud, and with a pilot hole.. the well has 1500 feet of well in the zone. what happened there and why it is not doing 3 times or 5 times what it is remains to be answered. but imho there is something wrong inside the well, you can appreciate that when a well is prepared for production many processes are put into play to get off the hole and there was a drill string that came apart, and had to be fished out. something is not right in kowalik. with 60 foot flares that 1500 section of the well should be thumping out gas and condensate. i still am not convinced kowalik is at full potential..

now both kennedy and kowalik have been drilled a long way further than anything else in the region with the exception of one..

lets look at the very much experienced and brilliant conocophillips efforts into the same formation shall we?

Kunde 3, not drilled once ,but 3 times!!!! so what went wrong? they couldnt find the formation, lost the hole? and the costs there would have been astronomical.. 2700 feet, is what they have, so for 3 attempts they got 1200 feet more in the formation than TCEI did with one pass on kowalik .. and you have to add into that two of the most expensive frac jobs seen ever on a well that both screened out. but for some miracle that well is flowing at

"The reported 7 day average stabilized rate was approximately 200 barrels of oil per day and 650,000 cubic feet of gas per day. This is approximately equivalent to 2.6 million cubic feet of gas equivalent per day."

this is a major oil company mick, not a small operator like TCEI, yet this is not brilliant.. they have thrown untold millions at this well and for very very little reward.

Lets look at the next two laterals, baker 1 and baker 2.

conocophillips were unable to complete either wells. baker 1 has 3 sidetracks done on it, thats 2 times they couldnt find the formation mick!!

"The third and final sidetrack spanned 13,230 to 15,100 ft. Significant shows and flares were recorded while drilling the entire 2,800 ft of open hole. The well continually tried to flow despite the high mud weights being used. This persuaded the operator to stop drilling at 15,100 ft, short of the original 17,800 ft, and attempt a natural open hole test. A plug was set at the base of the 7" casing and the rig released and replaced by a smaller and less expensive workover rig.
Workover operations commenced on 29 January 2008. The operator was forced to leave in the open hole a fish made up of a length of 2 7/8" tubing and a 5 7/8" rock bit. It is permanently lodged in the horizontal part of the open hole in the interval 12,676 ft to 13,097 ft."

Initial flows through a 12/64" choke were measured at 1.9mmcfgpd with 460 barrels of condensate per day. Based on present day prices for gas and condensate this would be
equivalent to 6.6 mmcfepd.

that well had months and months of extremely expensive work done to it, with a snubbing unit on the hole and a packer replaced in it. again that well costs a bomb, was sidetracked 3 times to locate the formation yet couldnt get through it to completion length...

by the time that well drops off and flows at stabilized rates i imagine it will fall far short of the initial flow rates.

3rd attempt by Conoco, baker 2, again a simple lateral is all that you want.. this time they got less of a completion, only about 1500 feet

"Empyrean has been advised by Texas Crude Energy Inc that the TCEI JV Block A #4 horizontal well has reached a total measured depth of 15,084 feet."

so what happened there? i know from the reports i got that they had major problems there, and this is what flow they got off the formation..

Flow rates over the test period have consistently been in excess of 2.0 mmcfgpd and 200 bopd using 10/64" choke.

so 3 attempts to drill kunde 3, 2 fracs both unsuccessful..
baker 1 three attempts to find the formation, and the most expensive workover ever seen on a chalks well..
baker 2, 1500 feet is all they got then lost it..


imho your selling tcei short, and underestimating the difficulties both conocophillips and TCEI face in findiong the formation, and drilling in the zone.. sure if our jvp had infinite cash and could afford to drill a 3 wells with 7 laterals, and could afford to the most expensive frac processes and workovers like conoco has we could expect similar results, but imho the TCEI drilling is going fine, i hear they have excellent engineers, and they really did a great job on kowalik once they located the formation. but extremely bad luck with the separated drill string and subsequent decision to stop drilling. TCEI are sampling and using clever techniques to make completions in the formation they want to target as cheaply as possible.

my view on this is fairly simple mick..

if you compare to COP, tcei have superior completions at minimal cost. and they have managed to get 2 wells off with extremely long completions which conoco has managed only once after 3 attempts on the first well, kunde 3, and have never repeated!!

kennedy is too deep, TCEI couldnt really learn from that as they were literally drilling the chalks for the first time at kowalik, and weston is the 3rd lateral to be drilled but only the second in the chalks, its got a lot of experience behind it and imho they will have a better chance on a good completion at weston and ARE using the knowledge of kowalik to get that well done.

i agree the results are not brilliant thus far mick, but much is learned, and weston is only the second go at the chalks.. and conoco and TCEI are both learning all the time..

early days imho and i cant agree on the the operators experience being the issue, imho its a combination of many factors that both operators have to overcome, and if i was to place money on anyone doing a long completion in the chalks, i think you have to make TCEI the favorite wouldnt you?