Not so sure on the idea of doing a re-completion on SL 1 to...

Not so sure on the idea of doing a re-completion on SL 1 to horizontal. If they are likely to be hitting high pressures and having trouble controlling the well they will be cagey on doing this under less than optimum conditions. A milled hole through existing casing for a sidetrack is certainly not optimum.

My guess is SL 1 will become a “donor” well used to test all available zones. At the end of the testing program it may be able to come back into production; however the rates may be low due to installed straddle plugs in the well bore if the production zone is not the upper zone. The upside of this is the valuable information on the production zones that would be gathered during the testing more than offsetting any decreased production.

However if the SL 1 testing and the new horizontal well looks good, expect a rash of rigs in the area. This being the case I would expect ADI to come to the market for funds to fast track development. At a potential $5 per share I think I would be taking up the options.

Cheers

Jami