umiat oil field update no 4, page-28

  1. 6,458 Posts.
    lightbulb Created with Sketch. 2646
    That is an extremely fine-grained sandstone, I'm not in the least surprised that it didn't flow well. You're looking at a rock with permeability probably less than 10mD. I'm assuming they photographed the better part of the reservoir for publicity purposes and if they had better rock samples they'd have shown photos of that instead, so this is probably typical of Umiat reservoir.

    But something doesn't add up here. How could a blockage form in EVERY single perforation tunnel? And then defy EVERY attempt to clear it out with solvents and surfactants?

    It's a hard rock, so it doesn't appear to be rock detritus. It's hot down there so it surely couldn't be ice, even in Alaska. It could be swelling clays, maybe. That's about the only thing I can think of.

    But more likely IMO is that it's not a blockage of every single perf at all, but that the reservoir is too tight for oil of this viscosity to flow properly in this sort of well. In other words the blockage isn't in the perforations, it's the reservoir itself. Initial flow could be explained by oil in the well from drilling and possibly from fractures emptying - then once it's gone, the oil flow stops because it can't ooze out of the reservoir fast enough.

    The formation was probably damaged with drilling mud too. All in all the worst possible completion you could do in that sort of reservoir is a vertical cemented casing/perf completion. It's pretty bizarre that they did it.

    A better option for a vertical well would be underbalanced drilling and a barefoot completion, which the US Navy apparently figured out 50 years ago. Still better would be a horizontal well, which Linc will apparently do next.

    Anyway - long story short, holders shouldn't be too concerned about this result IMO. This well was drilled for science - cutting the core and testing the deeper intervals. It wasn't ideally set up to flow oil. LNC shouldn't have built up the hype, but let's face it, that's a very LNC thing to do.

    Let them drill and complete the horizontal well before writing off Umiat. That's the proper completion technique in this sort of reservoir.
 
Add to My Watchlist
What is My Watchlist?
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.

Currently unlisted public company.

arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.