comparision between azz, ggp and vil

I just posted this on GGP thread.

Id just like to make a comparison with AZZ and GGP/VIL. AZZ own 75% of this well. Obviously they found both oil and gas unlike us, as we found gas and condensate (explained below).

8th December 2009:

The primary Anomalina C sand being the next reservoir was successfully perforated and is currently
cleaning up while on a restricted 6/64 choke. As pressures and flow rates stabilize during the clean up,
the choke size will be increased to achieve an optimal flow rate. Even during clean up the well is
producing commercial quantities of oil and gas. As of this announcement the Harrison No. 2 is flowing
approximately 200 bo/d and 500 mcf/d (4,100 mcfe/d on 18:1 revenue equivalency basis) at over
5,300 psi flowing tubing pressure.

20th January 2010:

The primary Anomalina C sand being the next reservoir was
successfully perforated and is currently in production on a restricted 6.5/64 choke at 5,400 psi. The well
is currently producing in excess of 200 Bo/d and 1,800 Mcf/d which equates to over 500 Boe/d.

Additional information (Non AZZ):

Anyone who doesnt know what condensate is:

Overall its :

Normally exists in the reservoir as gas, but condenses out as a liquid during productio. For more detail:

A natural gas liquid with a low vapor pressure compared with natural gasoline and liquefied petroleum gas. Condensate is mainly composed of propane, butane, pentane and heavier hydrocarbon fractions. The condensate is not only generated into the reservoir, it is also formed when liquid drops out, or condenses, from a gas stream in pipelines or surface facilities.

A low-density, high-API gravity liquid hydrocarbon phase that generally occurs in association with natural gas. Its presence as a liquid phase depends on temperature and pressure conditions in the reservoir allowing condensation of liquid from vapor. The production of condensate reservoirs can be complicated because of the pressure sensitivity of some condensates: During production, there is a risk of the condensate changing from gas to liquid if the reservoir pressure drops below the dew point during production. Reservoir pressure can be maintained by fluid injection if gas production is preferable to liquid production. Gas produced in association with condensate is called wet gas.

The API gravity of condensate is typically 50 degrees to 120 degrees.

Oil API:

Generally speaking 40 to 45 API gravity degree oils have a greatest commercial price and values outside this range have lower commercial price. Above 45 degrees API gravity the molecular chains become shorter and less valuable to a refinery.


Crude oil is classified as light, medium or heavy, according to its measured API gravity. Pumpjack pumping an oil well near Sarnia, Ontario Petroleum (from Greek petra – rock and elaion – oil or Latin oleum – oil ) or crude oil is a thick, dark brown or greenish liquid. ...


Light crude oil is defined as having an API gravity higher than 31.1 API


Medium oil is defined as having an API gravity between 22.3 API and 31.1 API


Heavy oil is defined as having an API gravity below 22.3 API.


My notes:

BOE conversion factors
Crude Oil 1 barrel = 1 boe
Sales Gas 1 petajoule = 171.937 boe x 103
Condensate/Naphtha 1 barrel = 0.935 boe
LPG 1 tonne = 8.458 boe

Thus 56 barrrels of condensate = 56 x 0.935 = 52.36 bo/d


1 barrel of oil equivalent = 1 barrel of crude oil
= 5,487 cubic feet of gas
(This ratio is based on the actual average equivalent energy content of TOTAL's natural gas reserves).

Thus 1.8 million cubic feet / 5,487 = 328 bo/d

Thus overall we have 328.04 + 52.36 = 380.40 barrels of oil a day. In my opinion, that is not a bad result for initial testing.

Furthermore and to comment on AZZ. They started with a choke much like ours of 6/64 and increased it to 6.5/64 which produced their most optimal and consitent flow rates. What is noted here??

We are looking in terms of gas, and in their first annoucement which was at a similar stage to where we are at now, they flowed at 500 mcf/d (we have 1.8 mmcf/d; substantially a lot more than AZZ). In terms of the second annoucement, they announced that the well was now PRODUCING at 1,800 mcf/d - an increase in their flow rate of more than 1,300 mcf/d or a percentage wise 72%.

As leebe notes:

"It is all about sustained pressure. If people want to read some real results then here is a link:

http://www.rrc.state.tx.us/meetings/ogpfd/ogpomer/documents/03-35627pfd.pdf

Note how flow rates increase dramatically IF the pressure remains. I think it is worth the wait until end of testing."

My thoughts:

Reading through announcements, they seemed very optomistic and positive about the well going into production with multiple and consistently high gas readings, to the point that they even bough extra acres to tie the well into the pipe system - so no wonder the well didnt meet expectations.

We are at a similar stage to where AZZ were on the 8th of December. The flow could increase dramatically as AZZ did by 72%. Furthermore, oil condensate is a good sign that oil could be down there. Note that in reservoirs that contain oil and gas, the gas, being the least dense, is found closest to the surface, with the oil beneath it, typically followed by a certain amount of water. SO therefore, we may have to drill a bit deeper or do a horizonal to find the oil.

In my opinion this is very exciting times for shareholders of both VIL and GGP. As tcissboss puts it - " I love oil and gas because most people dont have a clue and sell with the crowd".

Interesting times ahead and great buying oppotunities around.

FUrthermore and as i forgot to add in the GGP thread. This is only the first target of 3 MAJOR (annoucement word) targets. AND we still havent even completed testing for it - unbelievable!