Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : DALTON RESOURCES DAL:ASE -- Ignore unavailable to you. Want to Upgrade?

To: the Chief who wrote (189)	4/26/1998 4:31:00 PM
From: Michael M. Cubrilo	Read Replies (1) \| Respond to of 486

To Scotchman/Pete & Chief: Scotchman and Pete, now I know why you asked me to explain some drilling questions on the ETC thread. The 10% success rate number on these wells came from myself. In oil and gas drilling, there are basically 3 kinds of wells: 1) Infill/Development: Drilled within existing, defined pools. Success rate is roughly 70-100% depending on the reservoir and knowledge of the geology. A pool may be 30 years old and still have development drilling. 2) Extension/Step Out: These type of wells test the extents of geological formations & trends, or test the boundaries of the pool. Sometimes, additional wells are "contingent" upon the success of 1 or 2 step out wells. Success rate? Around 30-60%, depends on the geology and knowledge of the reservoir. Definately higher risk. 3) Exploration wells: Success rate is about 10%. Usually drilled after 2-D or 3-D seismic, but not always. Sometimes you drill blind. 3-D seismic is very expensive. Chief, you are correct in assuming that if a company has drilled what they KNOW is a good well, that they will try to tie up as much adjoining acreage as possible. This is not always easy to do. Land needs to be "posted" (EUB regulations in AB) which alerts other companies to look at their data and land and decide whether they also want to bid or whether they have to drill their lands to keep it, etc... Also, mineral rights come into play. Too complicated to describe in detail. The first indicator of what you might have are WELL LOGS. They are full of squiggly lines and peaks, sort of like an ECG of your heart, but to the TRAINED eye they will tell you where your zones are, thicknesses and probability of oil and gas and water. However, to actually know what you have one must perform production testing and record downhole pressure vs production to determine reservoir size, liquids, etc... sometimes for weeks, sometimes months. The longer the better. For an example of a recent oil & gas news release which describes this in detail, see a recent one from Northstar Energy (NEN on the TSE). A well may be very porous and contain lots of oil and gas, but with no permeability... it will not flow economic values of oil and gas. I would be happy to respond to specific questions. I am familiar with the Strachan area.... The Husky Oil Ram River Gas Plant is located 15 minutes north of the Gulf Strachan Gas Plant. I worked Ram River for 6 years. A good find from Dalton, Tusk & First Energy would be tied into either one of these two facilities. I am not a shareholder. If I was, I would sell at least 1/2 of my holdings on the run up. Remember, 10% success rate. With spec issues, I have found that selling before the facts are out seems to work most of the time. mike