Never wanted to post again BUT our critical well was meant to be our solution for successful debt refinancing and setting EGO up for success going forward. This well is the most critical play for EGO' and it's holders.
Here is my assessment after speaking to a few professionals in the industry for what it is worth.More technical people could elaborate more than me. The board should be saying this NOT me.
This well was run by Ken and his team of experts. Ken hired his ex Santos team drill manager and others as I understand.it. We paid big $ a day for these expert services. The board believed in Ken's expertise and lets face it, this was Ken's big stage as this was the only major thing he had to do since employed here. It's Ken's responsibility for this well. It hasn't gone to plan and this is my understanding of what went wrong. I am not interested in arguing or down ramping this situation. I am trying to join the dots and be constructive, so please don't attack me. Not interested in anything than seeing this well produce. As I am losing money by the minute.
When they undertook this well and it was a critical well as so much was reliant on this being a success. Every step of this well needed to be checked and re checked at every stage of drilling. I think mistakes were made and the result we are in confirms this to me.
The TH was not needed and the communication that followed by Ken was very poor. IMO Ken was way too negative. Did he rush this announcement, was it premature, I think so. Why was he so concerned about telling the market before they knew exactly the solution. We still had one zone to go. What they should have done was waited a few more days to work out exactly the situation and recommend a fix. They didn't and sent a very negative message to the market. Looked rushed and ill thought out imo. Very disappointing. I expected more from professionals. Just very poor communication all round and everyone deserved a more comprehensive response.
We know the hole was bigger than normal and indicated shale present. The cement was either not done well (covered the entirity, may have had no cement in parts and gaps present, logs would have identified this if continually checked at each stage)or concrete didn't set well, or even worse the integrity was compromised (whether not enough cement so integrity was breeched or too mushy, who really knows).
This well should have been constantly checked at each critical stage and re checked. Did this happen while wire log in place. Was it rushed or lack of attention to detail. Mistakes must have happened. The wire log would have confirmed integrity at every stage. This is essential before flow testing. Who is responsible for this well it stands out loud and clear to me. ERM, Board and holders all deserve to know exactly what went wrong or what wasn't done correctly prior to flow testing. Ken and his team has to answer this in detail to all. I believe mistakes have been made and would be very surprised if Ken remains at the company now as the responsibility lies with him imo. The board expected better as do every holder. Hate to say it as so much was reliant on this well being done correctly at every stage and confirmed a success. A lot at stake for holders, refinancing and importantly showed the market EGO is here to dominate the Perth Basin.
Now for the positive as I see it going forward as this is what Ken should have said instead of jumping the gun with announcement and sending a negative message to the market. This can be fixed as I understand it fairly cheaply less than $1 million as it is worth pursuing. If NOT then the negative is EGO is primed for a T/O imo, confidence lost, huge debt, no serious player will want to farmin while we owe so much money, etc. Not what we all want as a T/O price would be <45c imo as SP will continue to fall. So a lot to lose lets not be negative and fix this hole! Our very survival is counting on this.
They need to first find out exactly the problem, which they could have done prior to flow testing and spent a few more days before the rediculous and not warranted TH.
They will do a squeeze, go back into the well and there is risks for these 2 options.
Run low cost wire which is a straight forward exercise, success around 50-75%, basically they squeeze which involves perforating the casing and squeezing more concrete. Or plugging the outside casing and re concreting more risky. There are risks here and success is 50-75%. Importantly low cost. We have no option but to do this.
Now the upside is we were told condensate was around 11, what we have is 160 (15x what was expected) this is a huge wet rich condensate well. Even better than RG. as that was around 60, then dropped to 40. Repair this immediately and away we go. We have a 50m pay zone over 3 zones the D sands isn't a lot, but upper zones large and profitable, that is why we urgently need to repair. So much is reliant on this being successful. I believe it can and will be done.
The board has to stand up immediately and address the drilling failure and take action for what ever the responsible action has to be done quickly as it is clear to me that mistakes were made and we might not have the expertise to drill any further wells under this current management team. It concerns me that Ken is running this with ex santos experienced personnel, and look at Santo's last well, it was a failure and I believe Ken was using this expertise in this well. If this is correct then the board/ERM need to urgently address this matter and communicate urgently that they are now in the steps to repair this situation.
Everyone is accountable and time is needed for urgent rectification and once fixed then board can deal with the fall out of what went wrong and someone will be accountable. Changes would most certainly happen I would expect, if indeed this board are truly wanting to be seen as professional.
Interesting that large buys happening so someone either disturbed or Garret believe as I do all is not lost. We will survive but someone might have just fallen on the sword, sad but there's a lot at stake here. GLTA sorry about the long post but someone had to say it. Let's stop infighting and work together and assist in finding a solution if not well we are all going broke.
Board please step up and communicate and send a strong message. Stop hiding, work with holders and make this a success. Now going back to reading only.
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