p#1 post-mortem

For what its worth, here's looking back at a few keypoints from yesterday's update, now that we have 10 days to KonTiki.

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They've clearly stated that "5" liner was set & cemented and while retieving the Liner Hanger Setting Tool (LHST) they encountered mechanical failure with this tool. This led to the well being irrepairable & thus being plugged above the test interval making it impossible to do any production tests."

In simple words, P#1 is buggered due to mechanical dramas (firstly its not a DUSTER & it wont b a producer either because of two tools left behind, but I am a believer in technology & mankind!!). They also got the location of the well slightly wrong, as it wasn't drilled on the crest of the structure.

So, in short at P#1,

1) They couldn't log or test the primary target zone

2) For now they dont have an estimate of the reserves in place

3) They found a 228m+ gas bearing Plover sandy section with no Gas water contact.

4) The areal extent is now about 280 sqkm with about 430m of gross reservoir sands

These 4 factors are the reason why they need to drill a second well, Poseidon #2 at the right spot on the structure. I've always said this b4, that they had called TD at 5112m a bit too early, hopefully P#2 should answer that query.
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Karoon have sufficient cash so that's not an issue (sure Don Talbot wont mind another punt, lucky man indeed!!).

They are looking for a new semi-sub. The Transocean Legend is scheduled to drill for 3 months for Nexus (or could b enroute to Singapore, as we speak), while the Songa-Venus is booked by Shell, Songa-Mercury with Santos etc etc.

B4 I forget, I've put together a little illustration showing the above tale, plus couple of links to the tools they've left behind at P#1,

1)
LHS tool

2)
MDT tool

My sketch below is not to scale but it should give u an idea of the situation at P#1.

The thick grey line at the bottom represents the MDT tool pushed to the bottom. While the upper grey band represents the plugged section. The plug was set above the production interval (which I've guesstimated as the top of Plover sands @ 4795m)



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Its a bit annoying to see this happen but we are dealing with a 6" open hole, which doesn't give much room to experiment, hence the decision to cut loose & move to nxt location. Note that last Oct, Santos were caught up at Ichthys North for months.

For now, KAR can walk away from P#1 knowing for a fact that they didnt drill into fizzy water, they hit a mountain of gas, whose volume for now remains a mystery. So what was 25% back in Jan '09 is now 100% (confidence i.e).

Here's hoping that drilling at Kon-tiki goes allright, its near a well that was botched up by Woodside in the 70's with heavy mud to counter a gas kick. Another challenging gas mountain awaits Karoon.

IMO, its not a question of "Is there any gas in them rocks, more so, How Much?".

As Bon Jovi once said, 'Keep the faith' folks.

For now Adios Amigos!!!