RE: "Probably the most important part of the testing program is...

RE: "Probably the most important part of the testing program is how the thinner zones perform as thats all they have in SNE 3 and the SNE portion of BEL 1"

Hi Whisky

I had just prepared a dissertation on this, nice to see we agree occasionally, here it is anyway:

In Cairn’s 2004 appraisal program interference testing seemed to formed part and parcel of each progress well completion:
http://hotcopper.com.au/threads/cai...s-2004.2658714/?post_id=16582772#.VmnlHnnUiUk

Cairn in their Capital Markets day presentation indicated interference testing would come later, after all the drill stem testing for the first two wells (with a question mark).

I cannot believe that Cairn will delay reporting to that stage of the proceedings – I guess that they will report on SNE 2 as soon as the productivity testing is complete. To this end the following background is helpful and I reproduce these from previous posts:

Richard Heaton, Director of exploration, from Half Yearly Presentation:

“The first appraisal location will be in very much in the centre of the field where we expect the maximum height of closure of this structural trap. So this should give us the maximum gas, the maximum oil column through the reservoirs. The importance here is it will allow us to gather the most information about all the reservoirs and we will have an extensive coring programme here of at least three cores. We will have an extensive logging programme which will allow us to characterise those rocks and match them against the logs and the cores and we will then have an extensive testing programme at the end of the well to test both the reservoirs at the base which are more blocky sands and also the reservoirs higher up potentially where they are more heterolithic thinner bedded. The importance is we have got a very high data gathering content, it is very front-end loaded in this programme to ensure that as we go on through the development that we have got the information that we need. (My italics)

So the second well will be SNE-3 and if you turn to the next page that shows where that is located. It is in the south of the field at this level in the map. And here we will intercept the upper part of the reservoir within the oil column and we will have an extensive coring programme here again probably 3 or more cores. Subsequently if we get the right kind of reservoir quality there will be testing here of the oil within the thinner reservoirs in the upper part of the field.” (My italics again)

One thing that comes out of this is that the text seems to support Far’s image where the blocky sands do not seem to be present at SNE3 (or the SNE bit of BEL1 for that matter). With respect to recovery factors, in the CMD presentation Chris Burnside also indicated that:

In terms of recovery factor, we have a wide range at this point of time and as I say that also depends on the nature of the sands. We expect very high recovery factor in the blocky sands, with a favourable mobility ratio with the light oil and water you’d expect good recovery. In the thinner sands we might get less efficient recovery and so we’ve deliberately discounted our overall recovery for that until we collect some more information in the appraisal programme. (My italics again)

This I take it to mean that in arriving at their contingent volume estimates, Cairn have given a (?much) lower recovery factor to the upper thinner bedded sands mentioned in Richard Heaton’s first paragraph above. It also means that Cairn have included the upper thinner bedded sands in these estimates (Groan, Whisky please note).

Now FAR have separately indicated that they have identified additional thin bedded sands NOT included in the contingent resource estimates, so if these are productive they will add to the resource. No clue has been given by FAR as to the net pay that might be attributable to these sands (unless it is in the 30m/36m net pay differences reported by Cairn and FAR respectively), but they all presumably fall within the upper sand section.

Anyway, all in all given the above background, and assuming that the blocky sand productivity pans out as expected, the key to confirming or increasing the resource numbers will lie in the productivity of the upper sands section, both at the central SNE 2 well but particularly the peripheral ones where they are the only sands present.

Since SNE 2 is first up, to my mind all eyes should therefore be on the productivity testing results of the upper sand sections as surely this will be the first clue as to the likely productive extent of the whole field towards the periphery where the areal potential is large and also where most scope likely exists to add to contingent resources by way of increased recovery percentages if the results are good.

Or in other words, do not get too carried away by ripper productivity of the blocky sands, they don’t cover the same areal extent as do the upper sands so if the latter productivity is poor it will limit the field size.

Just my non specialist opinion worked out from the information given.

pj