production summary

Just some thoughts to date:


PEAK FLOW WAS 18,689bopd.
I am assuming this fairs well for the reservoirs porosity as it is indicative of high flows.

This was post acid treatment which would break down the formation around the production casing and enhance flow.

The peak flow was under natural flow i.e not pump driven or artifical ambient pressure enhancement.

Max flow was equipment limited.

A limestone reef formation has high initial flow and rapid drop off.



EWT.
The EWT commenced on 6 June.

100 days long means expected exit date is 13 Sep.

Currently 18% into the 100 days. 82 days remaining.

If prodcution is @ 10kbopd*0.424 4240 bopd*70USD*82=$24m
If prodcution is @ 5kbopd*0.424 2120 bopd*70USD*82=$12m
Fixed operating expense of 0.25*82*0.424 =~ $9m

So after 3 months we could be looking at a conservative $3-15m EBITDA.

somtehing which jumps out from the 24 June is 100 days of actual crude flow/production time.

To me I assume that down days of production simply mean its a one-for-one extension on the 13 Sep 10 EST cease date when they have production delays or shut the well in.

44 metres of casing was perfd.

The actual oil column is 124m+ in size.



WATER CUT
I dont know much about the water cut and impacts.

Based on the 24 June ann though, with 9 days since the last ann, they have produced 75,000 bo, so a net increase of 18292 bo in 9 days.

A smoothed rate of 2032bopd.

They indicate fluid production of 6000bpd at restrictred rate. The rate is intermittment.

If we assume 80% intermittent, then net fluid is 6000x9x0.8 = 43,200b

That equates to a water cut of 18,292/43,200 = 58%. Big assumption.

They are starting up the Elec Submersible Pump (ESP) as a part of their program. The initial announcement (8jun) indicates that it is already installed.

They will be testing multiple flow rates which seems to be a pretty standard part of trying determine the optimum rate for production based on water cut rates.

What I dont understand is how they can test the well with an ESP when the reservoir pressure already has the force to push at 18.5kbopd+? I can only guess that the reservoir is isolated from the surface via the ESP as it is connected to its own production line which sits inside the production casing? Or is this a subtle indication that they now need to use artificial lift???

I guess they could also vary the choke size then achieve and maintain an optimum production rates by increasing downhole pressure via the ESP? and hence manage the formation waters coning effects.



GALOC COMPARISON
Last Q, they received 148,200 barrels net to Nido.

T1 has so far produced 31,800 net to Nido in just 3 weeks. They are still on track to double production.



NEXT UPDATE
Previoulsy they indicated we would get an update once the EWT plan is done, along with the EXT rate.

They seem to have given us an interim update.

They will update us if something material happens OR

When they complete the Reservoir Management Plan, which I am assuming will contain the going test rate OR

SB gets on his soap box again. Worked this time.


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All looks good to me.

Any thoughts?

Cheers,

SF