Today's well crafted announcement certainly addresses my concerns and hopefully steadies the Market. Thanks Eric.
" The performance of both the Ungani 1 and Ungani 2 wells is influenced by the fact that they were completed for production prior to the excellent quality of the reservoir being fully evaluated, and consequently they have not been set up to optimise long term production rates. The Ungani 1 well has no effective isolation from the underlying water zone, and the base of the Ungani 2 well completion is close to the oil/water interface. This means that both wells have been predicted and expected to produce water relatively early on in their productive life, but that future production wells will be designed to maximise oil production and defer water production for as long as possible. One of the objectives of the Ungani 2 well completion and test was to attempt to produce water at different flow rates to obtain a better understanding of the reservoir behaviour. During the November production phase this was successfully achieved, with produced water rising to between 30% and 38% percent of total fluid flow. This behaviour is completely as expected, it matches optimistic modelling results and it demonstrates the excellent quality of the reservoir.
BRU Price at posting:
$2.53 Sentiment: ST Buy Disclosure: Held
