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Gold/Mining/Energy : American International Petroleum Corp -- Ignore unavailable to you. Want to Upgrade?

To: Millennium who wrote (7486)	2/20/1998 5:45:00 PM
From: Millennium	Read Replies (2) \| Respond to of 11888

Everyone has had questions about Thursdays' release. Below is a summary compiled by Lorrie Olivier of AIPC. We hope this will help answer some of your questions. First a little about borehole geophysics, well logs. To measure geological and mechanical properties of the formations within a well bore, tools are lowered to the bottom of the well and then retrieved by a wireline at a controlled rate. Different tools measure different aspects of data and it is only the combination of data from various sources along with the long data that pertinent measurements can provide key information as to defining a reservoir's limits, storage capacity, hydrocarbon content and economic value. Well logs can provide significant information as to hydrocarbon content and other key factors only if the logs are properly calibrated and the proper log is run considering the conditions of the borehole. In the case of CKB No. 1 we have no information as to the calibration of the tools and key logs providing data to cross check data are not yet available. The borehole conditions of the well were not optimum, as significant drilling mud filtrate should have penetrated the productive formations extensively due to the porosity of the formation. This is a safe assumption since the well took about 3 years to drill resulting in extended exposure to overbalanced and uninhibited drilling mud. Since logging tools are sensors calibrated to measure the time 4 electrical impulses pass through or are impeded from passing through a formation, any formation invaded by drilling fluid will have readings much like the drilling fluid. While drilling mud invasion is common and is normally adjusted to remove its distortion, we do not have the means to accurately make this adjustment in CKB No. 1. Therefore we cannot know with high level of certainty if the present log calculations have been corrected enough for the filtrate problem. The log evaluation conducted by Restech involved digitizing every foot of borehole measurement. This data was then subjected to extensive interpretation and analysis to translate the reading to a standard western type log format. All the Russian logs require extensive corrections that must be made in order to achieve a consistent geological and petrophysical description of the borehole. Modern western logs incorporate this function in the basic log presentation, then correction factors for type of formation, hole condition, and fluid are added for a final measurement of values. Restech used statistical models developed from other wells in the area which had more complete data to derive missing or abnormal readings that would not fit known geological and petrophysical parameters. What does the Restech evaluation parameters mean? Average Porosity 14.1% Porosity is the volume fraction of pore space in the rock. All rock is made up of either a single material or combination of materials (matrix). Rock with a porosity of 14.1% is generally made up of 85.9% solids and 14.1% pore space. The average is calculated from the various measurements taken over the interval being described. Maximum Effective Porosity 30% Porosity measurements over a zone of borehole can be distorted by the shale content or other factors that read like holes in the rock but are not connected and therefore cannot conduct the flow of hydrocarbons. Correction factors are applied to the porosity is 30% then there are porosity reading in excess of 30% in the borehole. Average Water Saturation 52.6% Measurement of the amount of water saturation is used to determine whether hydrocarbon production is probable, and to calculate the volume of oil for a given reservoir size (i.e. how many barrels per acre). Water saturation is defined as the amount of pore space occupied by water. The logic being what is not water saturation is oil saturation. The most correct way to determine the true water saturation of rock is from core analysis. Deductive techniques however can be used to estimate this value but they are no substitute for actual core analysis. Restech is using a deductive technique to derive a water saturation value for the rock within the interval of interest. Generally this technique is reliable but values can be significantly affected by the presence of gas and poor well bore conditions. In the case of CKB No.1 both of these factors were present. While we cannot be sure of the amount of influence in calculation of the high water saturation, we do have a lot of room to speculate that some the values may be too high given the limited knowledge we have of the well bore. Happy Investing.