third well on the way, page-33

There is some detail to grasp.. if you look at the announcements they are very vague as the JVP's were trying to say as little as possible to protect the interests of the major oil company.. we were never aware the Block A horizontal well was always supposed to coincide with the SL well, there were delays, 2 major ones, which were impossible for the JVP's to forecast.. TCEI as a operator at SL had delays as JVP in Block A.

Block A is next to sugarloaf, i am not certain of acreage, but believe the acreage is lesser than block B.

Block A has a production well which is vertical, than on the same lease a horizontal well, which EME and TCEI have a share in. There are reasons for the delays on the horizontal well, which i believe also delayed the SL well.

TCEI has operator status in block B, and they are as a JVP. looking at the results of the Block A horizontal well before setting out and mapping a 16 well program on both blocks.

So block B (sugarloaf) is in a holding pattern, awaiting the horizontal wells results from Block A. if its as good as its expected, then the sugarloaf results can give them a very good idea what horizontal wells can deliver in the sugarloaf leases.

The EME move to break ranks and jump on the block A wells has given the bigger picture to all. There is much riding on the block A results, the major oil company is not jumping on the bandwagon so to speak, as it looks at oil field development in a very practical and pragmatic way.. no guess work, just high quality research and technology, then test, then develop if practical..

My feeling is the Block A well results will be significant. Horizontal wells traditionally produce 3 -5 times a vertical wells output, and can reach reserves usually not reached by vertical wells due to the expense. i think the test results of SL were either as good or superior to the Block A production well, my feeling is that based on the wirelines they immediately decided and announced the testing of the secondary’s would be delayed. If the wirelines didnt show much they would have frac tested it then an there and done a P&A on it and wrapped it up in my view.. if Sl didnt compare to the production well in block A i see little reason for the delays..

Looking at it from TCEI viewpoint, why spend all that cash on Sugarloaf, when equivalent if not superior resources are being utilised in Block A, and can give you some real comparisons and great research results. TCEI isnt going to spend the same cash as an operator at sugarloaf and repeat the same again as a JVP on Block A, just to get the results twice that it only really needs once!! that would not be a good decision. TCEI is obviously very certain of what the sugarloaf well is capable of, has put it on hold, waiting for the delayed horizontal wells results, then will use the data there to plan the future on the SL leases. that is what ADI has announced in its last release on Sugarloaf, and my view remains that TCEI is playing a great game of limiting expensive cost overruns, using the major oil company and its research to understand how to unlock the chalks with horizontal wells, and being extremely clever and resourceful in its decisions right the way through.


I am happy to have a major oil company's research be the cornerstone of the decisions made on the future of the sugarloaf leases.

If there wasnt such a great result in the wirelines, i am certain there wouldnt be hold on SL and a frenzy to get hold of leases as we see. my feelings are if SL is superior well to the block A vertical, then we are in for potential blue sky.. the way the current situation at SL is being played out indicates there is more riding on the TCEI JV Block A #1 well than the sugarloaf results themselves..

all imho and dyor