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Gold/Mining/Energy : CURLEW LAKE RESOURCES (CWQ-VSE) -- Ignore unavailable to you. Want to Upgrade?

To: bcjt who wrote (417)	8/17/1999 9:05:00 AM
From: bcjt	Read Replies (1) \| Respond to of 701

Giant gas field again testing skill of drillers Filed: August 17, 1999 By BOB CHRISTIE Californian staff writer e-mail: bchristie@bakersfield.com Drilling specialists are walking a fine line in their quest to drill deeper into a natural gas-bearing formation at Lost Hills, taking a slow but sure approach in an attempt to complete a commercial well without having another blowout. The problems workers assigned to the Nabors Drilling USA rig are grappling with is clear to any casual observer — they are burning off gas in a flare. The gas flaring is a good sign in some respects; it means the drill bit is in the pay zone, and the well's owners think it may be hugely profitable. In other respects, however, it shows there are no small number of technical problems in drilling very deep into a newly discovered, highly pressurized gas reservoir. The first attempt to drill a well at this spot concluded with one of the largest blowouts in recent history in North America. The well blew out on the evening of Nov. 23, 1998, destroying the drilling rig and resulting in a six-month wild well. The current well was used as a relief well for the one that blew out, and now is designed to replace it and prove the new reservoir can produce commercial quantities of gas. If it is completed and successfully produces commercial quantities of gas, it will be the deepest producing well in California. The consortium of Canadian and U.S. companies drilling the well plan to deepen it to 19,000 feet from the current 17,428 feet. But they may never reach the target depth because of the pressure problems now being encountered. When the drill bit entered the gas-bearing formation at about 17,200 feet late last week, there were immediate shows of natural gas. Crews use drilling fluid known as "mud" to keep that gas from pushing its way to the surface. The weight of the mud is varied, depending on the pressure of the gas reservoir. The concept is to have the mud heavy enough to keep the gas or oil from flowing into the well bore but not so heavy as to go into the rock formation itself. Loss of mud into the formation can result in a blowout, because eventually the above-ground facilities run out of fluid to pump and the gas or oil will come roaring back up the hole. A blowout also can occur if the mud is too light and the gas or oil overpowers it. Complex blowout preventer valves are used to prevent either event, but they are not foolproof. This reservoir is highly pressurized, with readings exceeding 15,000 pounds per square inch. On Sunday, the drill bit entered a second producing zone with a different pressure, most likely lower pressure, experts said. What occurred next is known as "loss of circulation." Drilling fluid weighted for the higher pressure above began entering the formation, and crews were forced to stop drilling. That's likely when they began flaring the gas, because they were forced to lower the mud weight, which allowed gas from the higher pressure zones to flow into the "mud column." "They're walking the line now of keeping the mud weight heavy enough to keep the gas in but not heavy enough to go into the formation," said Claude Fiddler, a Bakersfield consultant and former Chevron executive with extensive experience with high- pressure natural gas reservoirs. "I think these guys, the owners and geologists, are jumping up and down with joy and counting their money, but old Jimmy Fox (the drilling consultant on the operation) and his mud guy are walking the fine line." The Canadian stock markets are booming on news that the well has again encountered significant quantities of gas, with most of the companies involved in the consortium drilling the well seeing increases of about 10 percent on Monday. But much of the movement apparently is on speculation, according to one Canadian stock analyst. "It's not surprising that the stocks are reacting to this, but right now they're trading more on rumor than facts," said Andrew Hogg, oil and gas analyst with Yorkton Securities Inc. in Calgary. Hogg said this well needs to be completed, tested and placed on production before more is really known. And more wells need to be drilled to prove the extent of what the companies are calling the East Lost Hills field, Hogg said. The first of those, about 2 miles to the northwest, is set to begin drilling by the end of the week. The problems the current rig is encountering will likely be the same on this well, if it is successful in hitting the same reservoir. But this well is designed to be able to handle it easier, because the drill rig is one of the biggest in the United States. The problems with pressure now being encountered on the well may force the operators to complete it and put it on production soon, without risking another blowout by trying to drill deeper into the formation. bcjt