a baggy ass oilmans perspective

Where are we at?

AOI as the operator of the AOI/Range Resources Joint Venture partnership will drill 2 back to back wells in Puntland within the next month or so.

Will they strike Oil?

If these wells were to be straight wildcat wells based on 2D or 3D seismic data one would estimate the chances of success as 1 : 10 thats right about 10%. These wells are not just based on seismic data but a combination of previous drilling results, known geology and very good quality 2D seismic. Therefore it a known proposition in the first instant. They will strike oil. Thats right 100% they will strike it. Thats is above 10000ft. already discovered. The questions then are:-
How much oil is above 10000ft?
Is there any oil below 10000ft?
How much oil is below 10000ft?

How much oil is above 10000ft?
Conocco drilled a well in the early 1990's and found a significant show of oil. Estimated to be very much commercial quantities in todays oil hungry world. This volume would by all accounts justify the work that has taken place to date and have a very useful financial reward for the JV partners and the Somalians alike. It could be 100's of thousand bbls.

Is there oil below 10000ft?
This is the $64,000 question. This will be the jewel in the crown. This is why the drilling rig must have the capacity to drill to 15000ft and possibly is being refitted as we speak. Although this target zone is unproven, it is what excites those that have had the opportunity to interpret the seismic data. This zone has huge potential with possible huge amounts of oil. It is more likely to be a 50:50 proposition but if the oil is proven as expected then this will make newspaper headlines around the world. It could be millions or billions of bbls.

How to move from discovery to production?
Will this reservoir have a natural bottom hole drive? Will the oil have a high GOR ( gas oil ratio)? Will there be sufficient gas pressure within the reservoir to drive the oil to the surface? Will the reservoir have a natural water drive? What will be the water cut? Will the reservoir require gas lift or water injection? Will the wells require down hole pumps?
It is most likely that this reservoir will have high down hole pressures and will free flow to surface.
Although AOI believe they can move from discovery to production very quickly it may require some extensive infrastructure and engineering.
Will the crude need to be stabilised before shipping via a pipleine? One would expect the gas will be flared initially to allow quick stabilisation and shipment. What size crude oil pumps will be required to pump the oil to Port? If there is a pipeline then there will need to be storage tanks.
It would be a pity to burn all that gas when it could provide heating and fuel to so many in need. It should be a priority of the Somalian government to build infrastructure to utilise the natural gas and LPG that will be a by product of this discovery and production.
Will this reservoir produce H2S ( hydrogen sulphide ) or CO2 ( carbon dioxide )and if so how will it be processed. It will need to be removed before shipment.

Anyway just the ramblings of a baggy ass oilman. Many shareholders wont care about the production challenges as they just want share price appreciation. That will come on oil discovery. It is not a question of if, it is a question of when and how much?