Ann: Thailand Drilling Update NSE-B2ST1 , page-2

I am unsure what to make of this, the market obviously did not like it one bit. I do not know drilling but know physics. In general fluid loss should be bad as it indicates there is no hydrocarbon pressure to act against the gravity pushing the drilling fluid down the hole. Fracturing and permeability is required for oil flow, but fluid loss indicates nothing else is there (like an empty sponge). However looking back at previous volcanic reservoir drilling announcements, drilling fluid loss previously occurred above oil producing zones. (see Thailand-ops-update261110.pdf ) This is why CVN were trying to show this was positive?

The total planned depth was 1095 m and with a pay zone of 106? m but the fluid loss occurred at 893 m. Is it likely that this empty permeable zone can be plugged off and the well still produce from a potential oil reservoir below? Do the seismic results they are using detect the actual oil or only the potentially empty fracture zones? Or does the combination of fracture zone encountered now and oil indicated by the seismic mean there is a much better chance of success here? Can someone who has experience with the technical aspects of drilling comment on this?