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03/01/24
12:03
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Originally posted by maltshovel:
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I share a lot of these concerns and give Scott a lot of leeway with lack of detail and keeping things far more conservative than other operators because of the simple fact that this basin has never been drilled before. You simply can’t compare to other operators in Perth basin or majors that operate globally. They are all drilling in basins that have existing wells with significant data to lean on for making the interpretation. Will try go through your points one by one and keep it brief but overarching theme is this is a new basin and we are scratching the surface. 1. Lack of porosity data in the LA penetrated to date was obvious miss with last discovery announcement given he gave it for the UA. My only thought was it was only a partial penetration and he plans to release net porosity numbers once the 6” deepening has been logged. Am nervous about this upcoming 6” given the reduced clearance for Wireline tools. Will just have to hope we get full log coverage and porosity values released. Permeability is the most uncertain interpretation and as I’ve mentioned before. I think the sidewall cores at MK-1 are not suitable for quantitative analysis (broken into discs and/or whole mud invasion has permanently damaged them), so don’t allow prediction of permeability with any confidence. NMR is often quoted (incorrectly) by a lot of people as measuring permeabilty, but it relies on fudge factors that are calibrated to core, so has a lot of uncertainty. The only indication we can rely on are the mobility values from the formation pressures and sampling. Not sure why he doesn’t want o give a range or anything. The interpreted DST result is as close to definitive perm data that we will get in the near term until the cores are processed. On the point regarding the UA quality, I think it is pretty low quality here. When applying conservative / harsh cutoffs, you are effectively removing the lowest quality rock and what’s left over that has been reported was between 8 and 10%. Once you add in additional met rock, you’re adding lower quality rock that will drop this average porosity while increasing the total net thickness. I don’t think the UA is good quality here. Can only hope it is as SM has described it is related more to geological depositional setting and not depth of burial as this is the shallowest we will find the UA. 3D is most important in putting the MK-2 (& MK-1) results into context. 2. regarding resources and where we sit, I agree we could do with some qualitative indication of where we sit compared to pre-drill but again I will give the company a heap of leeway because we are drilling a new basin on 2D so these two penetrations are unlikely to be representative of the entire field. I don’t recall any pre-drill numbers for net thickness / porosity / water saturation coming from SM, only a Mobil slide showing the output of their probabilistic analysis (be careful applying a single value to the entire area of the UA - geology varies a lot and we have a single penetration reported here. Mobil’s analysis would include a range of porosity and a distribution associated with that so it is impossible to make a reliable comparison and draw any confident conclusion when discussing IVZ vs XOM) We know it was revised up by ERCE and this was considered significantly conservative by Invictus (in particular for thickness that was used by ERCE and subsequent gross rock volume that this thickness defined from seismic) so I am not too concerned here. I don’t anticipate the updated resource to be released until after 3D has been interpreted with the results of the flow test and possibly another well drilled on 3D. 3. Flow rates for the UA are a concern given the low net porosity reported. For the LA we know it was approaching balanced conditions while drilling the over pressured intervals. I suspect they took a gain while drilling which indicates it wants to flow. How much is a guess at this stage, so just have to wait and see. 4. liquids content at MK2 was suspected to be lower than MK1 owing to acces to deeper / drier gas from Northern source rocks. I suspect SM is attempting to temper expectations until the CGR measurements are available from the lab. I don’t expect MK-1 and MK-2 to be in pressure communication if this is the case (and I think Scott let slip in a fireside chat something to this effect). The MDT fluid analyser is not accurate enough to quote CGRs and so I was not expecting this until samples were analysed but don’t be surprised if they are lean compared to what was thrown around during MK-1. Overall I am pretty excited still. I think the pieces of this puzzle is still being collected let alone finding the corners and edges to start putting it together. Lots to keep me interested in and will give the company a long leash given it’s a new basin. While I would like a heap more information I trust Scott and that hasn’t changed over these last announcements. He is doing what he believes is right for shareholders in my opinion. Cheers and my 2c etc
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Great reply…thanks for taking the time to put that together. I guess the only positive with the upcoming flow test is that we’ll get results from the open hole flow test of the high pressure LA zones after the well is deepened in 6” prior to testing the shallower cased zones. So we’ll be starting with the best chance for a decent flow rate first.