This is a copy of the same message I posted on the Kookaburra thread. I hope it answers a couple of your questions.
Firstly, the fact that the rig blew up is not a problem for the partners involved, as liability insurance is always carried just for such an event as this. There should be no negative impact in the share prices.
I have a friend in Bakersfield (he manages a rig in Africa - thanks Magoo!!!) who went out to the wellsite and estimated that the flame was 400 feet tall this morning. A Stanford source gave me an estimate of 100 MMcf/day gas being flared right now, with condensate flowing and burning all over the rig-site, at pressures of 18,500 psi.
In spite of the damage, this is fantastic news, especially when you consider that this is all coming from only 17 feet of open hole below the last casing shoe, at 17,660 feet. This well first had to be shut in whilst drilling, over two months ago, when the first gas kick was encountered at approximately 16,300 feet. Just imagine what will happen when they perforate the 1000 feet of hydrocarbon bearing sand behind this casing!!!
The flare we are seeing is not actually from "escaped gas from the well casing". The last casing was cemented off and pressure tested to ensure a good seal, before the 17 feet of new formation were drilled.
Chances are that the well could be under control in as little as 3 days, but of course it could take longer if there are additional problems.
This well will be controlled using dynamite, which effectively "snuffs" out the well. Drilling a relief well at this depth would take another 3 months!!!!!
This is excellent news, as gas is a godsend when oil is at all-time lows and natural gas prices are high. Condensate is also worth about twice as much as oil, per barrel.
Winter is coming, California is a huge user of energy, all the pipeline and refining services are right at East Lost Hills from previous projects and tie in costs for this well will be very small. The group is already talking about drilling delineation wells to prove up the size of this new field. Somehow, I don't think they will have a problem getting hold of a rig or two.
Given the flow rates and pressures that we are seeing here, this is definitely a big affair.
Good luck to all.
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