Just imagine the cash flow if both wells flow at 1500 BOPD on an extended production test. Ohhh yeahhh.
This also isn't out of the question as Ungani 1 had the following initial results..I quote..
18 October 2011 - Ungani-1ST1 - Oil Discovery Flows Strongly On Test.
"The well was swabbed initially after which natural flow was quickly established. The well has flowed light oil (API gravity of ~37 degrees), with no significant gas, together with varying minor amounts of completion fluid, filtrate and lost circulation material ("LCM") from the approximately 3,000 barrels of mud and LCM that were lost to the formation during the drilling of the zone.
The well was flowed for a total of 8 hours at varying choke sizes with a peak rate of 1,647 bpdon a ½ inch choke with a flowing well head pressure of 18 psi. The well has now been shut-in and the well head pressure is stable at 430 psi."
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19 October 2011 - Ungani-1ST1 - Operations Update.
"A flow rate of 1,500 barrels per day was noted on a ¼ inch choke and flowing tubing head pressure of 230psi. The well was continuing to clean up, with up to 15% filtrate, formation fluid and lost circulation material noted in the well stream. The well has now been shut in with a shut in well head pressure of some 430psi."
So it's going to be very interesting if Ungani-2 brings out similar results. The profit margins are excellent even if we truck the oil to BP's Kwinana Refinery...see quote below from the recent company insight interview with Eric Streitberg.
"Based on our current operating costs at our Blina and Sundown oilfields we expect that trucking costs will be in the order of $28 per barrel and lifting costs will be in the order of $10 per barrel. These transportation costs will be significantly reduced if we proceed with the construction of an export tank in the north. We expect the oil price we will receive will be close to the price of Brent, which is currently around US$110 a barrel.
Of course all of these costs will be shared 50-50 with Mitsubishi, as will any profits."
Maybe my best bet is not watching the market for a few months so I dont get tempted to sell. The sole purpose of Unagni-2 was to get a better idea on the size of the accumulation and the reservoir quality...also to confirm the location of the oil/water contact in the accumulation. Guys I found the following image..
Can anyone explain to me the significance of oil water contact? I have tried researching and understanding how it works. I am lost. cheers.
The one thing I do understand is the profit margins per barrel are extremely profitable so hopefully Ungani-2 flows strongly. Looking forward to Monday.
BRU Price at posting:
$1.30 Sentiment: Hold Disclosure: Held
