annoucement out, page-21

The update will give both bulls and bears enough evidence to say I told you so .

What was interesting was the comment about the commerciality of the Jackson sands. Several times it was stated that the sands are productive which had me wondering how can a productive sand be non commercial particularly when initial ip is thought to be 100 bbls. T

The answer lies in the fact that the Jackson sands are known to be gas producers and the oil quality is different. Both of these are not game killers in themselves but will require capital works additional to what is in the field.
It is then a question of is there enough gas and oil to warrent this? It may need 1000 bbls of oil ip and mmcfds to get it over the line.

At the moment Mad has a policy of shutting gas zones behind well casing which has allowed them to not have any gas seperators and gas lines expenses. It is not legal to flare gas in Texas for more than 10 days without a permit. A permit only allows for 45 days with a total of 180 days. You must have gas lines in place during the 45 days. This means that Mad has a problem even trying to test these wells as they can only flare for 10 days. With no gas infrastructure they cannot even ask for a permit.

From the railroad site

The majority of flaring permit requests that the Commission receives are for flaring cashinghead gas from oil wells. The Commission does not issue long-term permits for flaring from natural gas wells as natural gas is the main product of a gas well. Both oil and gas wells are allowed under Commission rules to flare during the drilling phase and for up to 10 days after a well’s completion for well potential testing. Rare exceptions for long-term flaring may be made in cases where the well or compressor are in need of repair.

The oil that is currently being produced is somewhat unique (high levels of naphtha) which is sold to refiners for premiums over the wti. There would be minimum grades required to gain access to these premiums which means that any dilution of the naphtha could result in a loss of the premiums. 100 bbls a day extra production of non naphtha oil could well disrupt this balance if the oil was blended via the storage tanks or oil lines. Again this causes problems at testing what do you do if oil is being produced at 100+ bopd? That rate is equivalent to a tanker per day. Tankers would be very expensive ATM with the demand from the EFS.

Hence for the above reasons this is why there is little test results available and until they can confirm a large enough field commercial production is not guaranteed.

Watch this space if they announce that there is we have a potential for a game changer. The Humble dome is a Jackson sand producer which produced in excess of 100 mmbls

Food for thought
Cheers Icharus