B.K. and Comeinspinner. From the June Q to the end of the Sept Q, I reckon that's the period that caused all the budget headaches. If you read those reports, they seemed to have spent all of the time, when they did work, on C18 and C19, they struck the "large salt plug", then continued testing below the cased section of the well and then above it, and during all of that time the reports state that they were using that 7" perforation gun.
From June Q (31 July), "The initial testing operations commenced on the open hole section with the lower C18 and C19 carbonates from below the final casing point at 3,600 feet. The Atzam #5 well intersected a major salt plug between the lower C18 and C19 carbonates which was assessed to compromise the initial flow testing operations. As a result, the Operator laid cement plugs in the well bore to seal off the salt lens intersected. Testing then moved to the lower C18 carbonates in Atzam #5 located above the cement plugs in the open hole section, but this section did not produce a strong commercial flow rate.
As a result, the Atzam #5 testing operations recently commenced on the C18 carbonate sections located in the cased section of the well, starting from around 3,500 feet. The Operator is now using a larger 7 inch perforation gun for the remainder of the program".
This would clearly be a FAR more expensive process and IMO, this is the period where I believe that H.O. were taken by surprise by the time spent on C18 and C19 and the consequent cost blow out by the Operator and what brought about the sudden halt to the testing.
I would agree with Comeinspinner, that this expenditure rate would very unlikely continue once A#5 is actually in production. At least we can now do something about it and hopefully, do that quickly and move into Tortugas soon after. But, let's get that going again and see what we get, will they still persist in C18 ar move straight up to C17 and above???
With all the "add ons" with that funding package, I'd reckon that they won't want to muck around any longer than absoluteley necessary in A#5 and just try to enhance income ASAP. They can always go back down to C18 in other development wells AFTER we have established a sustainable and profitable cash flow.
This "NEW TEAM" with an O&G expert wouldn't allow a repeat of what happened during June to September and will have far greater control over the operator than the lawyers and accountants.
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