Remediation of A2:To summarise -
Cast your mind back to 9th December 2022. In Melbana's comments regarding Alameda-1 (Upper Sheet) included the following:
"Alameda-1 received oil across the shakers almost immediately upon drilling out the surface casing, which was set at 453 metres MD. There was an almost continuous oil sheen on the shakers down to 1,130 metres MD, then again from 1,605 metres MD to 1,790 metres MD. High background gas with heavy components was observed throughout and drilling cuttings showed oil impregnation and fluorescence. At 1,842 metres MD, the well needed to be shut in and flared off, with a dark yellow flame indicating the presence of heavier hydrocarbons than just gas. Log pay has been interpreted within this interval where data quality was good and strong oil shows were encountered."
They then noted:
"Amistad Unit 1: from the top of the carbonated formation at 466 metres MD to an interpreted fault at 1,270 metres MD (subdivided into two units), oil was observed in the mud and fluorescence in the samples but log quality was generally too poor for reliable analysis. This was later determined to be due to an issue with the drill bit, which was allowing fluids to escape unpredictably leading to a wash out of the well bore. Unit 1 exhibited strong oil shows with increased gas shows in several zones."
Forward the clock to 28th August 2023:
"Unit 1A recovered 11.7° API oil with 3,783 cP viscosity at surface from a 63 metre MD interval starting from 445 metres MD. Flow rates at surface not established but 40 barrels of oil flowed unassisted to surface (through a 32/64” choke), exceeding expectations", "Unit 1B recovered 18.7° API oil with 30 cP viscosity at surface from a 70 metre TVD perforated section – less than 20% of the total Net Pay for Unit 1B (when incorporating fractures). Stabilised unassisted flow rate to surface of 1,235 bopd measured over 12 hours on a 36/64” choke, peaking at 1,903 bopd", "Logged Net Pay for the entire Amistad Formation has been increased from 109 metres to 346 metres TVD – further increasing to 615 metres when the highly fractured limestones are incorporated (45% of the gross interval)", and "Unit 1B has now been completed for future production, whilst Units 1A and 3 have been suspended for potential future development and production".
Bringing us now to the announcement of 9th September 2024 which stated:
"
Production from the existing completion in Unit 1B from the Alameda-2 well was recently brought back online to further refine our logistics, storage and processing arrangements as well as to build some more inventory. Remediation of this completion is planned for November, the objective of which is to restore the well’s initial production rate of 1,235 barrels per day", "
the work program and budget for the remediation of the exisitng Unit 1B completion and the installation of two additional production wells has been approved by our partner and the regulator with construction of the new drilling pads planned to commence towards the end of the current rainy season (usually around November)", and "
Our focus, however, remains on the development of new production wells in the shallower Unit 1B reservoir to increase the rate of production from the 46 million barrels of Contingent Resource (100% share, Best Estimate) as quickly as possible, which we expect to be able to do with the financial resources currently available to us supplemented by the revenue from oil sales".
They reitterated:
"T
he first phase of the field development plan involves the remediation of the exisitng Unit 1B completion (see below) and the drilling of more production wells into Unit 1B of the Amistad Structure, given our demonstrated ability to quickly access this shallower formation, to increase recovery of the 46 million barrels of Contingent Resource (100% share, best estimate)1 that was independently estimated to exist there".
Those comments about the
independent estimations come from the McDaniel & Associates report (Ref: Block 9 - Maiden Contingent Resources annoucement of 25th March 2024) which included the following Gross and Melbana-share OIIP estimates:
and Resource Estimates summarised/categorised as follows:
The most recent update from the company was from the Chairman on 19th November 2024, where he stated:
"
...preparations for developing additional production wells in the shallow Unit 1B reservoir have continued apace. This will begin with the workover of the existing Unit 1B completion in our Alameda-2 appraisal well. Our studies have delivered us valuable insights into how to repair the carbonate reservoirs to better maximise extraction as well as improve our well designs to minimise a repeat of this issue..."
with the Quarterly Activities Summary confirming:
So to put it in simple terms -
1. The objective of the A2 remediation is to restore the well to the initial production rate of 1,235 bopd.
2. Stabilised, unassisted flow previously peaked at 1,903 bopd.
3. The work program and budget for the remediation of the exisitng Unit 1B completion and the installation of two additional production wells has been approved by our partner and the regulator with construction of the new drilling pads planned to commence towards the end of the current rainy season.
It is as simple as that.
So: Buy. Hold. Patience.
Simples.
Kit.
(20min delay)