Ted, I would have to say that the broker you spoke with is talking out of his ar*e.
The formation we are about to re-tap has PROVEN commercial HC deliverability and quantity, beyond doubt.
During the blowout, Bellvue #1 produced an estimated 6BCF gas. That is more than many Alberta gas wells produce in a lifetime!
It showed no measureable drop in reservoir pressure over 6 months of open flow, indicating that the structure containing the fluid is VERY large.
Your broker's concern may be the water that was produced along with this gas, the origin of which still is open for some speculation.
However, if he knew anything at all about the O&G industry, he would realise that this is a perfectly normal phenomenon, given the circumstances.
He would also have done his homework and seen that the South Belridge field nearby has produced a large volume of water along with it's gas, and it has been hugely successful commercially for many years now.
With respect to your broker, I suggest to you that he has not done his homework on this one. Where did he get the 20% figure from?
Please understand that the success of ELH is not a "sure thing", but personally I would give it a >90% chance, given what is known about the play. This is just my opinion, but I know it is shared with many others that, like myself, are directly involved in the O&G industry.
Happy trading.
S&P |
