soa #2 - over hyped or a no brainer ?

Ok guys, this is the company maker in my opinion. The recent presentation stated.....

Permian/Pennsylvanian targets, 10,000 acres, 250 wells, 200,000 barrels EUR per well, 50.0 Million barrels of oil in total. Value to the company $1 Billion, NAV $10.00 US.


As of the last announcement, Frontier Drilling rig 11 is drilling towards the first target,a stratigraphic trap mapped in the Permian section at approximately 9400 ft. So what is a stratigraphic trap......


Stratigraphic traps are traps that result when the reservoir bed is sealed by other beds or by a change in porosity or permeability within the reservoir bed itself. There are many different kinds of stratigraphic traps. In one type, a tilted or inclined layer of petroleum-bearing rock is cutoff or truncated by an essentially horizontal, impermeable rock layer .

Or sometimes a petroleum-bearing formation pinches out; that is, the formation is gradually cut off by an overlying layer. Another stratigraphic trap occurs when a porous and permeable reservoir bed is surrounded by impermeable rock.

The second target at 11,000 ft is a structural trap in the Pennsylvanian section.....Structural traps are traps that are formed because of a deformation in the rock layer that contains the hydrocarbons. Two common examples of structural traps are fault traps and anticlines.

So, has anyone else tried to to drill these traps near our leases. Terry has confirmed that Nobel produce 600-900 BOD unaided from wells targeting these anomalies in Wattenberg field but that's around 130 miles away. Kleinholz Field in Western Nebraska is about 80 miles to the east and companies have been targeting these traps for decades. Geobrand2 posted this in January after researching this field....

"Update to Kleinholz Field. (The closest field similar to SSN's SOA.)

Taken from the Nebraska Oil and Gas Conservation Commission, By 1997 the Kleinholz Field had produced 6,668,235 BO from 33 wells.
That is average of 202,067 BO per well and still flowing.

Given these are vertical wells and consequently cost approx 40-45% of horizontal fracced wells their cost in todays dollars is approx $US3.5M. With oil at $90 it equates to 39,000 BO to regain costs."


Sounds promising but what can go wrong. We have to get past the salt and bubblegum shale first. Then we need the oil to be there obviously but even then we need permeability and porosity to be in our favour so the oil will flow. And what happens when we reach the first target.....from a previous announcement.......

"The forward plan, which is subject to change based on drilling conditions, is to drill through the
Permian target, at which point a logging run will be undertaken and in order to put the salt section
behind pipe, a 7 inch casing will be run. This will enable the balance of the well to be drilled to the
planned total depth of 11,000 feet, at which point it will be logged to assess the rock quality and hydrocarbon saturation. "



So there is lots of work to get through before we know if these conventional wells are going to be the real deal. But we're having a go and that's what it's all about. Prove up the resource and go forward from there. We should know something by the end of May.


OMR