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Gold/Mining/Energy : KOB.TO - East Lost Hills & GSJB joint venture -- Ignore unavailable to you. Want to Upgrade?

To: JL who wrote (780)	12/9/1998 4:39:00 AM
From: Salt'n'Peppa	Respond to of 15703

JL. For once, I agree with you. Okay. Let me explain the situation to the best of my ability. The well has extinguished itself, and it likely IS Temblor water, that underlies the oil\condensate\gas column we have seen being produced for the last 2 weeks. It looks like what happened is that the well has "coned out", meaning that there has been such a large negative pressure on the formation around the well, due to the sudden exit of a lot of gas, that fluids have been drawn in to fill the void, water being the densest and therefore the last to appear. We know that the first gas kick occurred at approximately 16,300 feet, some 1350 feet above our current position. We know that they were producing hydrocarbons the entire time they were drilling from 16,300-ish feet to 17,660 feet. There was no sign of water. We know that they lost the drilling mud from the wellbore, whilst drilling, two months ago, at 17,640 feet (+/- 10 feet). They then regained control of the well and ran a string of casing (9 5/8" casing, I think). We know that they drilled just 17 feet of new formation before the well blew out and created this mess. We know that the well produced a minimum of 100 million/day and 1000 bbls condensate/day for 2 weeks, unrestricted. What I suspect we have is a monster gas reservoir (3TCF is still conservative), at least 300 vertical feet thick and potentially 1300 feet thick. I think we have drilled through the gas column and set pipe in, or just above, the oil layer. There is a marked drop in the pressure gradient as you go from one to the other (a fluid characteristics thing), not to mention a drop in pressure with depth as you drill away from the "overpressure" situation created by the thrust-fault. This is how I think the blowout occurred. We know they had weighted up their drilling mud significantly, to counter the gas pressure, but on entering the denser phase became overbalanced, lost their borehole fluid column (thus becoming severely underbalanced) and had the gas come in on them. This is just my opinion, but it makes absolute sense. Feel free to bandy it about with any oil-types you know. I'd like to hear if my argument is flawed. In short, I think we are in great shape, geologically. Financially, the markets will probably react in a negative way. It will take time to assess things, and to drill Bellvue #2. Speculation will run wild for a time. The potential is definitely there for ELH to go sky high yet. I hope this helps rather than confuses. Regards, Rick.

To: JL who wrote (780)	12/9/1998 8:25:00 AM
From: Mr Metals	Read Replies (1) \| Respond to of 15703

She's dropping like a rock and the market is not even open..I'll be buying today if she hits my target:-) MM PS...Excellent post.

To: JL who wrote (780)	12/9/1998 11:47:00 AM
From: RSkarsten	Read Replies (1) \| Respond to of 15703

JL No I didn't sell the farm. The barn perhaps. If you look at mondays trades for PYRX you'll notice a couple of 1k buys at $5 that occured first thing in the morning. That was me(typical of my past years luck to get in at the highest). That added to my holdings acquired on the previous Friday morning of some pyrx, sog and kob. I dumped everything yesterday morning after Pyrx had dropped to $4 and ended up breaking even. After seeing 3 million shares trade on Kob this morning, all in the .80 to 1.00 range, i figured that was a good enough bottom for me, and i got back in, doubling my holdings in Canadian stocks. I'm leaving SOG alone for now as it moves only half as much as KOB. I'm betting that a repeat of Monday's trading will happen in reverse, that we will see the lowest prices early on. I feel that there is a well there, no doubt, and if i can double my holdings without contributing more liquid assets then in that sense I have made a gain. Sure there is a risk, but that's what makes all this an adventure right? I mean, that is the reeeal reason we trade. If this all busts, then i didn't loose anymore than i was prepared to risk on Monday or Friday, and I've doubled my take. I'll risk it again, if the opportunity presents itself. I like the excitment. Russ