Ann warro update, page-45

Once again, the more that is argued the clearer the intentions. The hidden agendas are exposed and the misinformed “opinions” continue. Reading between the lines suggests to me some bad blood and being previously burnt may be creating severe cynicism and obscuring the current facts and preventing objectivity. Some of us have moved forward from the water of 3 and 4 and understand why a flank play based on the newly acquired 3D with wells positioned away from the fractured part of the trap is a new ball game. ALCOA certainly has!

Firstly we read the fear of needing 10-15mmscf/d and now even the bottom end of that is uneconomic. Talk about upping the ante on the downramping. At least don’t do it in the same thread to make it so obvious. Wow, one of our posters must have someone at the well head to see things deteriorate that fast.

It is extremely challenging to plan a well program of this nature, considering the depth of the well, drill pad locations, environmental considerations, analysis of surveys and the complexity of fracture stimulation operations, etc, etc.... Also, consider all the local, state and federal approvals, stakeholder consultations and commercial contracts that are required before spud, not to mention booking / scheduling / aligning all the contractors for the drill and frac into a continuous operation. To suggest this is not exactly hard is ridiculous. Even if it is not hard, it takes a considerable period of time to organise.

TSV does not need the money to complete the frac program, in my opinion, as ALCOA is still to exhaust its $100m to complete the 65% earn in. Research I have read suggests ALCOA will not hit $100m from drilling 5 and 6 alone. These wells are onshore and close to infrastructure the last time I checked. Anyway, blind Freddy can see TSV only has a couple of million in the bank and will need equity and debt at some stage in the near future. In the event debt is required for field development, ALCOA has agreed to facilitate TSV’s share of any debt required on commercial terms up to predetermined limits as part of the farm in agreement. Reading the terms of the farm in and associated documents will provide you with more details. Fear mongering around debt and equity requirements is simply stating the obvious requirements as with any hydrocarbon field development anywhere in the world. However it is a favourite of down rampers.

Flow rates of the vast majority of hydrocarbon wells across the entire planet decline naturally without intervention (e.g. CO2 injection) and is often referred to as the “production tail”. To state this is somehow unique to the nature of this reservoir in this well location is preposterous. TSV don’t need to mention it as it is a globally observed fact that most people with some knowledge of hydrocarbon systems already know. However it is a handy tool to spread fear among the uninformed.

My point 2 below was supposed to refer to 3 and 4! Sorry about that everyone! The porosity of the reservoir rocks and their ability to flow after fracture stimulation is completely separate to the water ingress thought to be controlled by the heavy faulting in this area of the trap. The expected flow rates of these reservoir horizons in 3 and 4, being the same zones targeted in 5 and 6, are highly relevant in my opinion. They were likely laid down over a similar time and in my opinion, have similar characteristics in terms of their porosity and amenability to fracture stimulation.

I’m going to stick with the facts as can be read and rationally understood and not waste anymore of my time addressing what I consider to be misinformed 'opinions' that are clearly designed to bait and downramp.

As always, time will tell either way!

Marxist'