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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: JungleInvestor who wrote (42117)	4/13/1999 12:54:00 AM
From: Aggie	Read Replies (5) \| Respond to of 95453

Jungle, hello, What are these ARCO guys doing there? Is that just their heritage, or is ARCO a partner? 1. 5 billion barrels? Super giant field? If only 38 million barrels have been proven, are the 5 billion the possible? Sounds farfetched. 38 million is on the low side to justify development for a remote field. 2. Fractured carbonate reservoirs can be efficiently depleted using horizontal technology but it depends on the reservoir. Carbonates are typically tight and depend on the fractures to provide channels for the formation fluids to move through. Because of this, however, depletion rates are typically quite high (you may have heard the term "fracture depletion"). Normally the fractures are vertical in aspect, and the idea is to drill horizontally to intersect the greatest number of fractures. If, however, water cut is a problem, as it is for example in the south Texas Austin Chalk, then you may just end up cutting lots of fractures which reach down below the oil/water contact - hence the well waters out that much quicker. 3. You haven't mentioned the depths involved, or whether there have been any problems with wellbore stability. Typically with fractured carbonates (limestones and dolomites), if this has been any kind of problem while drilling vertically, then it stands a good chance of becoming a serious problem if drilling directionally or horizontally. Columbia is a region which is known to manifest problems with wellbore stability due to tectonic stress. I wonder if that is a factor here. I would doubt that they would choose to try to produce simultaneously from a horizontal drainhole and a vertical well - I might be misreading your comment about 11 producers, did they already have 6 wells before the 5 dry holes?. Typically a casing window is milled (if necessary), then the hole is plugged back with a sidetrack plug. The well is then sidetracked to horizontal. It has become a fairly common practice to drill dual horizontal drainholes and complete them separately. The fractures I spoke of usually have a regional context, so the idea would be to have 2 drainholes 180 degrees apart (one headed north, one south, for example), again, to intersect the maximum number of fractures. 4. I think Oilperson may be lowballing here. My guess would be about 18-21 days for a remote location for the first drainhole, and maybe 14-16 days for the second - if there are no drilling problems. The cost of drilling in Columbia is not cheap, considering you need your own army for backup. I think his high side cost estimate is not too far off, but you need to add completion costs to it. My guess would be $1.5 -$1.8MM for 2 drainholes (very rough). Whether or not they turn into 'World Class Producers' is anybody's guess - mine is that they will produce like a bat out of hell for about 3 months then quickly become candidates for downhole pumps. 5. Why are ARCO acidizing - Is it an acid-frac? Acid jobs are typically done in carbonates to remove near-wellbore damage resulting from drilling operations. Acid-frac's are designed to extend the existing natural fractures. As to whether or not the oil is worth $4 - 5 in the ground - well, let's let the money men tackle that one. I've read the raves about this one, but for my money the company's too small on market cap to tackle this project. Watch out for a big boy coming along looking for something to swaller - you may just get diluted out of existance. The correct term for this condition is "Arakatitus", and it's usually intially contracted by trips to Vancouver. The disease then lies dormant until it is activated by subsequent trips to the violent third world countries where the oil properties are located. Regards and Good Luck, and if you're in Columbia, watch yer top knot... Aggie