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Gold/Mining/Energy : Tusk Energy (TKE) -- Ignore unavailable to you. Want to Upgrade?

To: kingfisher who wrote (747)	7/23/1998 3:37:00 PM
From: Ed Pakstas	Respond to of 1207

'Cause "friggin' fracers" are to expensive....<ggg>...ed

To: kingfisher who wrote (747)	7/24/1998 9:55:00 AM
From: puthar	Respond to of 1207

My understanding is hat the engineers at Apache did recommend to frac, however strategically, if I was the upper management, I would do the same. Remember, Apache has the money and if any of the small partners could not put up the cash call, (guess what!!!). This is a huge find, 1/2 a trillion c.f. of reserve. The tight hole status only helps Apache. Juniors' share prices can be depressed and without full value being realized on their stock, it becomes difficult to raise significant money for future wells. That's where Apache could step in, hence the decision of upper management not to frac. I understand that they had 4 days to comply with partner's decision or to give being an operator. Apache is going to frac, and watch for movements at the site.

To: kingfisher who wrote (747)	7/24/1998 2:25:00 PM
From: grayhairs	Read Replies (2) \| Respond to of 1207

Hi Richard, I have personally viewed the Strachan 3-22 well flowing at a rate that I estimated to be about 3 - 3.5 MMCF/D. It has been suggested that at that rate the well was only on a 1/4" choke and had ~3,000 psi flowing tubing pressure!! So, this well quite likely is already capable of flowing about 8 - 10 MMCF/D as it is now completed (just by opening the choke and dropping backpressure on the tubing). When they do an acid frac stimulation of the well, the rate increase can be very large. A rate of 40-50 MMCF/D is quite possible if the porosity is vugular and/or fractured (but damaged from drilling and casing operations). Without analyzing the actual bottomhole pressure data gathered during their last flow test it is impossible for me to project what the rate increase would be. I hear that certain parties in the well were somewhat disappointed with the initial rate because they were expecting some whopping flows of 40-50 MMCF/D originally!! BUT, DO NOT PUT TOO MUCH EMPHASIS ON THE FLOW RATE!! THE RESERVES ARE HUGE. LOTS CAN BE DONE TO INCREASE THE RATE AND A LOT MORE WELLS CAN AND WILL BE DRILLED ON THIS PLAY EVEN IF THEY CAN NOT PRODUCE AT MORE THAN 5-15 MMCF/D!!!! For what it is (or isn't) worth, my best guess as to what's happening between Apache and the juniors goes as follows: I think that the juniors have calculated (from the pressure data collected on the last flow test/buildup) that a frac will yield a very large rate increase and they want to announce a large flow rate as soon as the tight hole status is lifted (so as to help them in their future financings). So, they are FORCING Apache to do the frac now. I expect that Apache is resisting the frac because in all likelihood they will initially only produce the 3-22 well at a rate of 10 - 15 MMCF/D anyway. So although a frac would be required in the future, in the near term a frac is a bit of a waste of cash for Apache. Have a good weekend. Will next week also offer the good bargains?? Later, grayhairs