I had expected this report last Friday, as that would have been the two week mark, but maybe they were on downtime and didn't want to report at that time.
Drilling wildcat wells, is drilling into the unknown. I have always stated that they had trouble correlating their seismic to drilled samples. When the formations come in higher than expected, the disappointing information comes quickly, when the formations come in deeper, then running a VSP is good practice to confirm their thinking is in the right direction. A couple of days spent getting this confirmation, is definitely considered a good investment in time.
Hornet, I believe the green line, is the bottom of the target formation, which appears to be the Dey Dey Mudstone. Basement is the red line, where the sediments finish. I am not sure what the purple line is.
It appears they are drilling cap rock in the Cambrian, which is required for a conventional trap. The zones of interest lie in the Pre-Cambrian below. I find it funny, before they drilled the well, the expectation was for a flowing well. Now they are within 200m from TD, and the lower formations are marked as "unknown". I would suggest that there were a lot more unknowns before they drilled than there is now, but I suppose that is the art of a good salesman.
I am intrigued at the time lost due to a leaking wash pipe. To change a wash pipe, of which you always have a spare rebuilt and ready to go, takes about 1 1/2 hrs. The problem is, especially if the hole is causing a problems,is you need to pull back into the casing, to safely change the wash pipe, and run back to bottom. The fact they said, they were rigging up for running back into the hole, sounds like they may have pulled all the way out and changed bits or the like. Unless there was more complications with the wash pipe, a short spool containing a series of seals that last for about about 400 to 600 rotating hours, designed to be changed at short notice, or hole problems pulling out, I just don't understand it even being mentioned in a stock exchange report.
As for actual drilling rate, it is hard down there folks, but there is no mention if they have cut any cores? I would have liked seen further mention of back ground gas or any other indications of hydrocarbons.
Well the next report we get should surely be at TD and we should have a result. With the difficult drilling, it would be hard to see shale oil being exploited at these depths. Maybe shallower formations may work, but these Cambrian/Pre-Cambrian just seem toooo hard.
LNC Price at posting:
99.5¢ Sentiment: Hold Disclosure: Held
