october, page-15

Hi everyone. This is what I posted on 28/8/08

"The university of Oklahoma will also look at a chemical flood of the Shannon at Ash Creek. This had an OOIP of 21MMbbls so if they come to the conclusion of 15% recovery (which seems to be a very likely figure for chemical floods) then this will add another 3MMbbls for ELK.

Grieve is likely to be 76 X 15% = 11.4MMbbls so ELK could have a total of 14.4MMbbls based on a conservative recovery of 15% for both fields. Chemical flooding will be a lot cheaper and quicker to perform.

Maybe they can go ahead and flood Ash Creek first, get a good cash flow from that and leave Grieve for later."

We have two fields being studied by uni of Oklahoma for chemical flooding. I used 15% as a recovery factor but newtothegame is quite right in saying that it could be upto 25%. Chemical flooding seems to give an incremental boost of at least 15% and as much as 25% of OOIP in most cases and it is particularly suited to fields with light oil.

The 21MB OOIP for the shannon at Ash Creek is based on the company's information and we know that Grieve had around 76MB OOIP (this was confirmed by both EORI and Nitec). If we use 15% recovery we have 3.15MBO for Ash Creek and 11.4MBO for Grieve. If 25% recovery is achieved then we can get 5.25MBO and 19MBO respectively.

I'm hoping that ELK moves quickly with a chemical flood on Ash Creek then gets production upto about 1,000 bopd to get a strong cashflow, and to show Exxon/Conoco that they need us more than we need them. We have time on our side for the CO2 because Rancher is a very risky bet at the moment especially for Exxon. If Rancher fails then Exxon will be in a rush to do a new supply agreement.