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

To: Saverio who wrote (2860)	5/29/1999 6:58:00 PM
From: grayhairs	Read Replies (1) \| Respond to of 15703

Your thanks are not at all necessary. (I simply try to help people better understand an industry that was truly very good to me during my career.) Re: "This prospect has substantial remaining risk.", before I comment on some of those risks, it should be understood that the risks remaining are not unique to this prospect. Similar risks exist with other gas plays at a comparable stage of exploitation, too. Also, large rewards almost always require the assumption of some risk. Some of the remaining project risks are: 1) Is the seismic interpretation sufficiently accurate at this point to define the structure without some dry holes being drilled ?? I very much doubt it. 2) Is there cross faulting of the structure that chops a huge accumulation of gas into several smaller ones ? Probably, although it would appear that at least the #1 well has hit a very very large pool. Other wells may be in different and smaller pools (but so what !!). 3) There may be a degradation of porosity and permeability of the sands with depth. There could also be a degradation of sand quality away from the #1 wellbore. (On the other hand, we should be aware that things might also improve !!!) 4) If the Temblor zone is actually 2,000 feet thick we do not know definitively how much would be filled with gas\oil\water. There is data that suggests there is no water for about 2,000 feet below the top of the zone but that is not at all a "precise determination" it's just a "good suggestion". Production data suggests to me that there is no oil in the ELH #1 well, just gas and condensate, but.... 5) If the ELH structure is cross faulted, one reservoir could be filled with gas while an adjacent one might be completely filled with water. Only more drilling (or a lot of production history) will help arrive at a proper definition of the entire structure. But, we do very clearly know that there's a whole lot of gas that is somehow connected to the top 17 feet of the Temblor sand penetrated by the #1 well !! By my reckoning, that well has produced over 5 BCF in just 6 months !!!! And, rumours are that there has been no perceptible decline in reservoir pressure\energy. Of course there are other risks. Others may care to comment on some that I have not touched upon here. Good luck. Later, grayhairs P.S.--I avoid 1 liners in an effort to not be misunderstood. Sorry.