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

To: Dave E. who wrote (2848)	5/29/1999 11:05:00 AM
From: grayhairs	Read Replies (1) \| Respond to of 15703

Morning Dave, <<Although this is my first try at a gas play, this does appear to be an extraordinary opportunity which has not yet been recognized at all outside the ELH club.>> Well, what a way to start Dave !! You sure do know how to pick them. Please, do let me know what you choose for "your second gas play" !! Also, if you have not yet had your first shot at an oil play, please let me know when you fire that one too !! This discovery certainly will not go unnoticed for long. It is a world class discovery. It will have near term impact on the California oil and gas industry (lease acquisitions, seismic programs, drilling activity, facility construction, pipelining, etc.). Within a couple of years, it will also impact the consumer cost of natural gas within the state of California. <<What is your take on the drilling time for 1-R to the Temblor in view of: 1) They know a lot more about the formation now 2) There seems to be no likelihood of abandoning 1-R altogether 3) They don't have to hit the target as tightly as the relief effort (still amazed how that was done!)>> I'd guess that they can be to the Temblor top within about 45 days. They will be kicking off the #1R well at about 10,800 feet to commence the replacement well. As you point out, their target now will be several acres in size, not just 7" in diameter !! They will have no need to continually monitor their drilling trajectory. Neither will they have to remedy all departures from the planned trajectory. And, it is those activities take a lot of time and effort by the drillers. Watch out when Neil Darling is turned loose and all he has to do is "make some hole" !! What the JV does after they reach the top of the Temblor is of course hard to say. The insurance company will, I believe, be obligated to get them 17 feet into the Temblor and then they are outta there and I expect that they will say "Good riddance !!". The JV partners must collectively decide at that point if they will then drill into say the top 100-200 feet and complete the well to ensure that they have "a producer (i.e. a cash cow)" ?? Or, do they attempt to learn much more about their target by drilling to the projected base of the Temblor which is expected to be 2,000 feet thick ? My personal guess is that they'll play it by ear with their plans subject to change on just a minutes notice. At the first sign of ANY drilling difficulty, I think they'll just case and complete, BWTHDIK JMHO. It is therefore impossible for me to provide any "meaningful" estimate of time to TD. [And, in defense of ELK who has been criticized in the past on this thread, please recognize that because of requisite partner input, coupled with not knowing what "problems" may be encountered during drilling, it is also extremely difficult for an operator to provide precise time estimates !!] <<The Cal Canal hole should spud in 1-2 wks as there is activity at the site. Have you got a fix on when ELH #2 will spud - seems they are still waiting for the special hi-pressure pipe?>> Bob Christy has addressed future drilling activities in his updated (and excellent) coverage of the kill this morning (A must read for this thread). His comments about future drilling are consistent with what I have heard through my sources. Drilling is not being held up or waiting on casing, as far as I know. Have a pleasant weekend. No golf for me this morning as we have rain here in Calgary and I tend to be a fair weather flogger !! <gg> Later, grayhairs