brr and mla on production testing at 1450m

Baboo Ram Runchik:
I believe that there is a production test to be done at Kingfisher at the 1450 - 1453 metres level by Metgasco pretty soon. As a shareholder of 52 shares, is the family excited?

Mr Lincoln Augustus:
Well Baboo, we are excited. I have to correct you about the 52 shares though...we do not hold 52 shares in Metgasco now, as we have bought a few more.

BRR:
So you hold more than 52 shares now

MLA:
That is right. We feel quietly optimistic that things are going well, so we thought that we would invest a bit more. I mean, the returns from Holymagiman's plantation is good, don't get me wrong, but we thought that we should divest our investment strategy a little bit.

BRR:
So what do you think about the upcoing Kingfisher trial stimulation?

MLA:
We have to go back a bit in time there, Baboo, but it is good of you to ask.

You see, on 13 November 2009, the company put out this report:

"Following successful flow testing at the 1,274 metre interval, drilling continued to 1,395 metres. Due to high gas readings and the potential for hole instability the drilling fluid was converted to mud at this point.

"Upon resumption of drilling, a subsequent strong gas kick was experienced at 1,452 metres. The indicated formation pressure was 2,200 psi. Drilling was halted to increase the mud weight to control the gas show.

"Additional gas shows have been encountered in the subsequent intervals. The intersection of additional gas shows below the first primary objective of the well supports the prospectivity of the Kingfisher field."

BRR:
Yes, I remember that report well. That was when Kingfisher was going through lots of gas bearing levels. The company did not say too much about that strong gas kick did they?

MLA:
Spot on, very exciting stuff, having a strong gas kick and everything. It seems to us that Metgasco is very constrained in their reporting, but that has been their way all along. Better than some other companies who flash their wares like madames in a bordello.

You know, we have noticed that in some company , the board just cannot stop telling everyone what great thinks they think may happen. A lot of very reliable companies have done this, like CVI, HIH, One-Tel, ABC Learning, take your pick.

And the shareholders want to believe everything they are told because they are shareholders, and good news is always preferable to the truth, especially if it is bad, and so they are unable to be really critical of what they are hearing. There are still lots of companies out there that are promising the world, and we hope that they can deliver, for the sake of the shareholders

So there are a lot of shareholders who live in hope too, closing their ears to everything except the idle chatter of likeminded fellows, and we sincerely hope that they do not go down with the burning ship, like the boy in "Casabianca".

ButI digress...we are talking about Metgasco, and the family is of the opinion that Metgasco is being very restrained in its reporting so far.

BRR:
So what else has been happening with this testing?

MLA:
Well Baboo, actually they have been doing some interesting things. On 2nd July 2010, Metgasco announced that:

"On 17 June 2010, Metgasco perforated a three metre zone in the Gatton sandstone at 1450- 1453 md. An impulse build up test was conducted on the shut in well bore. Pressure from this zone built up quickly to 2040 psi at the well head.

"Prior to conducting flow testing on this zone, Metgasco ran a static gradient survey which indicated no liquids in the well bore. A flow test was subsequently run and the Test 5 reservoir flowed at an initial rate of 168,000 scfd on a 10/64 choke with a wellhead pressure of 285 psi. The analysis of gas composition from this zone was 94.8% methane, 2.35% ethane, 1.6% nitrogen and 1.25% other trace gases.

"Preliminary test analysis suggests the existence of natural fracturing in the reservoir. Metgascos current interpretation is that a fractured zone around the well bore contributed to rapid early pressure build up which is consistent with the gas response encountered during drilling.

"Additional pressure testing and flow data is currently being acquired.

"The results to date from the testing program on the Kingfisher E1 well have confirmed the presence of a large gas resource within the Kingfisher gas field. The Kingfisher field can be characterised as a stacked sand reservoir with gas bearing sands of varying permeability and porosity. A significant number of these sands have demonstrated tight gas properties.

"Tight gas is currently a major contributor to gas production in the US where proven fracture stimulation techniques (or fraccing) have been successfully applied to exploit tight gas resources.

"Fraccing involves stimulating the production of fractures within a tight matrix rock and propping open these fractures with sand or other proppant material to allow gas to flow to the well head.

"Production rates generally improve by a significant multiple from the application of this process. Metgasco is now well advanced in designing a frac for the Kingfisher field which will be trialled in the Test 5 interval.

"Information obtained from this frac will form the basis for detailed frac design work for future Kingfisher wells."

BRR:
That all sounds very exciting. So the fraccing will improve the flows by a significant multiple, am I right? I am holding my breath on this one.

MLA:
Most probably so, and especially if you remember that this was the zone with a strong gas kick. We are hoping for a good flow rate from this level. But I also think that you will have to stop holding your breath because you are turning somewhat blue and bloated.

BRR:
Thanks for reminding me to breathe again....sometimes I hold my breath and forget , and then there is every chance that I will get carried away. Pffttt, just like that.

MLA:
A man's got to breathe when a man's got to breathe, no two ways about that.

BRR:
And so, if I understand rightly, if this frac method works, then future Kingfisher wells will able to be tested faster

MLA:
That is our understanding of things too.

BRR:
So what is happening now?

MLA;
Well, as Metgasco say, they have finished the stimulation testing and now they are going to be proceeding to the flow testing stage. So they have done a number of flow cycles and when that is finished and the well is clean, a production testing will be done. All very exciting indeed.

BRR:
So when do you think results of that will be out?

MLA;
Well, the family hope for some results to be out in a couple of weeks, give or take. And we hope the production testing will be satisfying all round, especialy in light of that gas kick they encountered on the way down.

That's just our thoughts, really, and we always live in hope, don't you? It will be good if we can afford to buy two turkeys this Christmas, and maybe a goat. Probably not good for the turkeys and the goat, but there are a lot of turkeys and goats around this time of year, all clucking and maaing around, so I don't think we should worry too much about them. We look forward to a good Christmas with the blessing of the Lord.

BRR:
You probably think that I am a turkey but I am living in the hope that you will let me have some Numba One just now, what do you think....helps to clear the mind and jollys the interview along no end?

MLA:
Baboo, I have to remind you this is a family program and there are many children reading this....we do not want to put too much on their immature minds....I will let you have the Numba One after we finish this interview and not a moment sooner.

BRR:
Well, if that is so, I will have to agree with you that this interview is running way overtime and we will have to gather the threads and call it a day. A few last words, perhaps?

MLA:
Well, a quick comment on the Thornbill wells. Thornbill E01 intersected 13 metres of coal and shale and Thornbill E02 intersected 20 metres of coal and shale in the walloon Coal Measures with no water production. So that is most encouraging.

We feel that everything is looking good.

BRR:
Especially as you now have more than 52 shares....Now, that is good, but I have to say now that the time has all run out and so, this interview is now over, thank you for coming.

MLA;
It was a pleasure, thank you for asking me to come. Blessing of the Lord.