the hog technical thread., page-3

Programme of works for the Chernetska licence (expires Jul 12) and the Sorochynska licence (expires Aug 12):


Sorochynska-1 draws from B18b, which is the low-hanging fruit in the licences (being reserves, estimated at 13.6Bcf gas, 0.4MMbo). This provides the cashflow for financing further drills. And a big thanks to Hartleys for chipping in *cough*. Ahem.

Chernetska-1 doesn't have any reserves. As such, there's more risk. The well should yeild *something*, because it has produced before, but it requires good fortune to get a good spot and high flow rate. The well spudded in early May, and should be finished by August. HOG has chosen to provide monthly updates (this is a pain, as many other posters have said; every other O&G does weekly drilling updates). The next is due at the end of this month, which should say something like (we're at 3.Xkm down, getting ready for the last little bit and then we'll do some tests). I hope they start to provide weekly updates at that stage.

After that, I believe that Hawkley shoud be drilling the B24/25 resevoirs close by Sorochynska-1 so as to share the HOG gas processing plant (can anyone correct this?). Possibly at the site of the old 201 (it produced, but was outside the drainage area of the Sorochynska-1 twin). Announcement regarding plans should come soon, as negotiations are to be concluded this month. These resevoirs should have been tested during the inital Sorochynska-1 drill, but I can't find any information on the outcome of this. (Anyone?) Multiple wells anticipated for these resevoirs, due to large contingent resource estimate (~200Bcf).


HOG have minimum work quotas to complete for the 5-year licences to turn into 20-year production licences, and Moyes have stated that a continuous drilling programme will be necessary. Does anyone have any details on the minimum works programme?


After these 3, Chernetska-2 will be aiming for B24/25, and testing B21/22 in the same drill. If the B24/25 drills work out in Sorochynska and Chernetska, full production liceces are granted, and nothing untoward happens (I'll leave speculation as to what that might be out of this thread), then HOG will have made it as a company (this will be 2H 2012). Resources will be converted to reserves, there will be decent certainty about future cashflows.

Dexter, do you have any figures on JKX's well production in the last few years? I'm still trying to grapple with the various porosity/permeability typical figures for visean sandstones, and why these were high for Sorocynska-1 (HOG claims care and fancy mud, essentially. You claim greater natural fracturing?)

The typical 9-14.5% and 5-15 mD figures are for upper visean sandstone in Sorochynska, no data for lower visean. For chernetska, typical figures are 6-20% and 1.2-270mD (big range/undertainty) for upper visean, 2-8% and 1.2-10MD for lower visean. Seismic data suggests high fracture density within the license in Chernetska, so I am hopeful. Average pay thickness in carbonate for other wells in the area is 21m.