oil question, page-5

Hello Tinhopper,,

I am very sorry for the much delayed response, but my broadband internet has been down for the last 4 days..........Very frustrating..!!!!

With regards to the Stewart-1 announcement,,as i mentioned in a previous post, there was always a degree of risk associated with the Outlar-1 follow up wells..

In this field there is 4 major seismic anomalys,,Outlar-1 is in the first,,, Stewart-1 into the second,, and so on it will go..!!
The 3D seismic shows the geology,, in and surrounding all 4,, to be constant,, but the anomolys are discontinuous..!
Whether or not it's due to " fault lines" or being "geologicaly compartmentalized", is really irrelevant..!!

The anomalys are even further complicated by having a very segmented perimeter surrounding the concentrated high density centre area.
Naturally the objective of the drill bit is to intersect the pay sands within the high density area of the seismic anomaly.
Outlar-1 did just that, but Stewart-1 has hit the segmented perimeter,, missing the main target by several hundred feet..!!

3D surface seismic is good science but certainly not infallible when images are returning through 12,000 ft. of solid substrate..
Down hole logs have the final say, and can identify the hot spots very accurately, and in the case of Stewart-1,, they'll know exactly where they need to be.!

I can't tell you anything helpfull about the " Jackson interval up well bore" that they intend to test!
Nobody can,, because it's an unknown entity,, it's not supposed to be there,,it was a revelation even to the company..!!
However, they did log the interval and it's a 10 ft. gross gas sand with strong gas shows,, so we'll see how it goes..!!

In relation to missing the desired target by several hundred feet, this sounds fairly drastic on paper,, but from a drilling perspective,, it's not a big deal for any competent drilling crew..!!
It would not surprise me in the least,if they had to do this on all of the follow up anomaly drillings.

My personal accessment on the 3D seismic [ for what it's worth ] is that the Outlar-1 had the highest density concentration, and therefore the easiest to hit.
The other three are larger but a good deal more tricky..

It costs more money , of course, but it's worth the expenditure in my opinion.
In 1994 a gas discovery immediately adjacent the Outlar-1 anomaly, yielded 7 mmcuft/d gas and 400 bls/d condensate,, and it's geology was identical to what's being targeted by AZZ..

Unfortunately Tinhopper,,,, the average punter is not even slightly interested in any of the above,, just the fluctuation level of the SP,, and the company having to release an announcement like that, during the tax loss selling month of June,, is less than desireable.......To say the least..!!

In relation to the last production announcement on Harrison-2, it's on a highly restrictive choke [ 8/64" ] ,,for the reasons outlined in the announcement.
We can expect an increase in the production rates when the well is allowed to flow at maximum capacity.

A generalised average increase from this sized choke, to free flow, at pressure levels of between 5,500 psi to 7,000 psi, produces a production increase in condensate of 60% and gas of around 70%..
If one was to allow an "average across the board" production increase of a conservitave 50%,, that would be a reasonable expectation in my opinion..

The company said that they would report any major production increase separately, or up-date in the next quarterly report..!
My opinion is that we'll have to wait for the next quarterly, because they will lift production in small steady increments only,, so as to keep any reservoir damage to an absolute minimum..!

Harrison-2 is in the Oyster Crk. tennament,, which is a group of leases covering 1700 acres,, with three separate faults..!!
There is ample room in this same fault for a H-3,,and at very low exploration risk.
At a working interest of 75% as opposed to West Wharton at 25%,the financial remuneration is at a ratio of 3:1.

It would be of great assistance to the SP and shareholders, if they could make this happen sooner rather than later IMO..!

I hope the above may be of some use to you Tinhopper,,, and good luck with your investment..!!

Cheers..