looking good

Eromanga Hydrocarbons Limited (ASX: ERH, ERHOA) (Eromanga) is pleased to provide the following update on the Klick 22-1H horizontal well in Woods County, Oklahoma. As at 6.00 am local time on Tuesday 23 November, drilling operations had finished and 4.5? casing had been set and cemented. Drilling ceased prematurely due to concerns that even with an 8.9 ppg mud weight the well continued to flow gas and oil and increased drag on the drill pipe in the lateral section was inhibiting the drilling rate.
Final Measured Depth is 8,726 feet (2,658 metres with a TVD of 1,526 metres) which the Operator has estimated to represent approximately 3,500 feet (1067 metres) of Mississippian reservoir in the lateral section with excellent oil shows and gas kicks with an additional 300 feet (91 metres) of additional Mississippian reservoir in the curve section.
The Operator has advised that open hole logging of the lateral section will be replaced with Weatherford multiple array neutron-density cased logs which, when combined with gas kick, well flow and sample examinations will provide the necessary information required to determine preferred perforation intervals in the lateral section. The Operator has further advised that the well completion phase will commence in two weeks.
Details of well
Royalty Owner
Working Interest (%)
Net Revenue Interest (%)
CMX, Inc. (Operator)
49.2
40.0
Eromanga
49.2
40.0
Chesapeake Exploration Limited Partnership
1.6
1.3
Six parties with Over-riding Royalty Interests
-
18.7
Phil Galloway
Chief Executive Officer
[email protected]
In accordance with ASX Rules, the geological information of this release has been reviewed and approved by Mr John Weston, Executive Director of Eromanga Hydrocarbons NL, BSc (Hons) and MSc Geology. Mr Weston is a member of the Society of Petroleum Engineers and has more than 30 years of relevant experience within the industry and consents to the information in the form and context in which it appears.
Attachment 1
The Klick Drilling Program
On 26 July 2010, Eromanga executed a binding agreement to acquire a 49.2% Working Interest in Klick East located in the East Half of Section 22-T29N-R14W, Woods County, Oklahoma USA.
The transaction also included an option for Eromanga to acquire a similar interest in Klick West under the same terms.
Klick 1-22H is the first of 2 wells that are permitted for the Klick Section with a further well planned for Klick West, should Eromanga take-up its option to participate in that Block by July 2011.
Recent nearby horizontal drilling activity by both Chesapeake and Sandridge Energy Inc. has been successful, especially in combination with ?slickwater fracturing? technology. Both Sandridge and Chesapeake has demonstrated that horizontal drilling of the Mississippian reservoir delivers greatly enhanced initial production rates of oil and gas and significantly increases oil and gas recoveries.
In addition to exploiting the Mississippian with horizontal drilling, secondary oil and gas resources are known to exist in the Hunton, Viola and Simpson geological intervals. These zones, if found to be productive, could yield additional oil reserves in Klick East and Klick West.
Horizontal drilling rigs, service companies and oil and gas production infrastructure are abundant in the Woods County resulting in low production costs. Crude oil may be readily trucked from surface tanks by numerous competitive purchasers.
About CMX
CMX was founded in 1987 and is a private energy company with offices in Kansas and Colorado. The company is actively engaged in drilling and development of natural gas and oil prospects in the continental United States, with a primary focus in the Mid-Continent regions including Kansas and Oklahoma.
CMX is managed by a team of professionals with many decades of experience generating and developing oil and gas prospects on-shore USA. Throughout its existence, CMX claims a success ratio of over 80%, across exploration and development drilling. CMX maintains extensive digital well and well log databases and operates highly developed geological, engineering and geophysical evaluation programs. CMX has demonstrated effective project management of its drilling programs and successful cost control systems.
The Brazilian Analogue
Eromanga believes that the production characteristics of the Mississippian cherty carbonate reservoir in Klick East and Klick West can be considered to be analogous to the reservoirs encountered in Eromanga?s Tatu discovery in the Guara field and the Paca discovery in the Harpia field in Brazil?s onshore Sergipe-Alagoas Basin. The reservoirs all demonstrate relatively low porosity and permeabilities with extensive sub-vertical fractures, both produce low to medium API oils with high water production, both exhibit significant hydrocarbon intersections in vertical wells.
Eromanga anticipates that is will be able to replicate any success achieved in horizontal drilling at Klick East and Klick West to Brazil.