palta - efs - cooper, page-4

the article should be read by every stx investor imho

but with the upper eagleford discovery of theirs, it really makes the county an exciting place to drill

strike has some great lavaca county acres and in fayette imho they may finally prove the efs is commercial as soon as they actually complete a well in the right zone


Upper Eagle Ford Discovery

Penn Virginia has recently reported an important discovery well, the Fojtik #1H in Lavaca County, that tested with a strong 24-hour IP rate of ~1,200 MBoe/d, of which 865 b/d is oil. According to the company, the IP rate would correspond to a ~500 MBoe EUR, assuming the existing type curve. The well was completed in the Upper Eagle Ford zone which is different from the Lower Eagle Ford zone where all of the company's previous wells were completed. The upper zone is located about 100 feet above the lower zone and is a calcareous interval, that can be easily fracked, with good porosity characteristics. Penn Virginia is "convinced" that the Lower Eagle Ford and Upper Eagle Ford are actually separate reservoirs and it will take a well in each interval to exploit them. The company does not believe that there will be significant fracture system interference between well completions in the two zones, but recognizes that confirmation by well test results and microseismic will be required to firmly determine that.

Penn Virginia is currently working to determine what parts of its acreage are prospective for the Upper Eagle Ford. By very preliminary estimate, as much as one third of its position may be prospective.

As shown on the map above, the Fojtik well is located at the far eastern edge of the company's acreage. Penn Virginia is drilling another test well in the Upper Eagle Ford about 17 miles southwest of the Fojtik, on the far western part of its acreage in Gonzales County. The well is the middle wellbore of the three-well pad, with two adjacent wellbores (about 700-foot separation) landed in the Lower Eagle Ford. The test should provide relative performance data for the two zones.

Penn Virginia has also suggested that it has seen good shows on logs in a third interval located in the Austin Chalk formation, which is above the Eagle Ford, and has potential to be productive.

While it would be premature to give much valuation credit to the Upper Eagle Ford, the zone has the potential to make a meaningful contribution to the drilling inventory.