ADI - Adelphi Energy

[Logique]

Have bailed on this one.

And on a few others too. It's more about the overall market conditions than about ADI specifically. Where there's smoke there's usually fire, so Agent's faith in ADI will probably be rewarded. I'm taking the risk of missing a big announcement and being left behind on the price action.

Will be watching closely, ready to re-enter.

 

[Agentm]

TCEI JV Block A-3 Well BAKER
----------------------

Empyrean has been advised by the operator that significant further gas shows and multiple gas flares have been encountered over approximately 2,700 feet during drilling of the horizontal section of the well in the target zone. It is important to note that the shows and flares were encountered whilst drilling with relatively heavy mud weight and that the well was observed as trying to flow naturally. This has prompted the operator to cease drilling at a measured depth of 15,100 feet prior to the planned total depth of 17,800 feet in order to carry out a natural open hole test to see if the well will flow commercially without stimulation.

The drilling rig has been released in order to bring in a workover rig to run tubing and commence testing as a natural open hole completion. Depending upon testing results the operator has advised that a water frac may then be used to enhance flow rates. If non-commercial flow rates are sustained following a water frac then it is likely the operator will bring the drilling rig back on site to continue drilling to the original planned total depth.

The testing is expected to commence shortly and a further announcement will be made when the workover rig arrives on site prior to commencing testing.

The commercial significance of the gas shows will not be known until the full results of any testing are analyzed.

TCEI JV Block A-1 Well KUNDE 3
----------------------

Present operations are the running of 41/2" casing to tie back the 41/2" liner in the horizontal section of the well all the way back to the surface. This is being done in order to get a higher pressure rate than the previous 7" casing would allow, such that effective fracture stimulation can be carried out using a conventional gel sand frac. The 7" casing did not allow for high enough pressure to effect the fracture stimulation.

 

[fflintoff]

From q44 on ADVFN:-

"If the well wants to flow naturally under these sort of conditions it is VERY significant. This is a major major opportunity for longs imho.
q44:"

 

[Lucky_Country]

Very good announcement wonder if Kennedy 1 had any significant flares ?
Lets hope this is the start of good news for all jv partners.

 

[barney]

Very good announcement wonder if Kennedy 1 had any significant flares ?
Lets hope this is the start of good news for all jv partners.

Very positive indeed ....... EME up 15% atm on about three times normal volume, so the market is obviously watching this play with interest ..... Considering the whole of Europe is down tonight it certainly looks "encouraging" ..........

 

[Agentm]

with baker in the vicinty of 3 miles away going for it..

The drilling rig has been released in order to bring in a workover rig to run tubing and commence testing as a natural open hole completion. Depending upon testing results the operator has advised that a water frac may then be used to enhance flow rates. If non-commercial flow rates are sustained following a water frac then it is likely the operator will bring the drilling rig back on site to continue drilling to the original planned total depth.


its certainly interesting.. couldnt drill any further, so why not produce from it hey!


It is important to note that the shows and flares were encountered whilst drilling with relatively heavy mud weight and that the well was observed as trying to flow naturally


this part is very interesting.. its been said "its important to note" there were shows and flares.. that got to be the most conservative description of the wells drilling activities i have ever seen so far.. how many shows are there that can send a rig to the moon?


if what happened to baker is a a show and a flare, then the "elevated back ground readings" we hear about at kennedy would have to be 50 times more than what they are described as also!!


happily waiting for conoco to figure out how to frac that kunde 3 well, its got a lot of complications that are imho pretty exciting ones to be dealing with.... if they can frac it without burst then i think both baker and kunde 3 wells themselves are showing right now some problems indicative of potential commercial flow.. in any case they seem to be indicating the confidences that baker is capable of commercial flow right now. and i am of the opinion all the wells are equally charged and capable of the same thing..

i am extremely optimistic now that the formation and the readings that both sugarloaf 1 and kennedy 1H, in terms of the sugarkane and the understandings that we are in the same structure, combined with the recent announcements by eme on the kunde 3 and baker wells, fits well with the ADI objectives!

• size and nature of any drilling prospect has to be of
sufficient scale to achieve a “high impact” outcome​

in a discovery/success case;


the sorts of statements made by adi in the recent annual report are begining to look a good to me..

We believewe have discovered a new play in this part of Texas
– so with 80 square kilometres (20,000 acres) under
lease, we are now in a position to fully benefit from a​

successful outcome.


i remain convinced of that also and good luck to all holders.. i am certain plenty of news is to come over the coming weeks..

 

[jackohelp]

Agentm>
Do you believe this to be classed as a continuous accumulation as defined by Schmoker of the USGS.? Or do you believe it to be unconventional in some other way, i.e to do with the fact they are using some fracc techniques to get flow.

I asked Mr Kelly , but so far has evaded the direct question of a continuous accumulation.

from Schmoker......
Continuous petroleum accumulations form a geologically diverse group that includes coalbed methane, “tight” gas, basin-center gas, oil and gas in fractured shale and chalk, gas hydrates, and shallow biogenic gas. Despite their obvious differences,
these various petroleum deposits are linked together as continuous accumulations by two key geologic characteristics:
(1) they consist of large volumes of rock pervasively charged with oil or gas, and (2) they do not depend upon the buoyancy of oil or gas in water for their existence.

 

[Agentm]

Agentm>
Do you believe this to be classed as a continuous accumulation as defined by Schmoker of the USGS.? Or do you believe it to be unconventional in some other way, i.e to do with the fact they are using some fracc techniques to get flow.

I asked Mr Kelly , but so far has evaded the direct question of a continuous accumulation.

from Schmoker......
Continuous petroleum accumulations form a geologically diverse group that includes coalbed methane, “tight” gas, basin-center gas, oil and gas in fractured shale and chalk, gas hydrates, and shallow biogenic gas. Despite their obvious differences,
these various petroleum deposits are linked together as continuous accumulations by two key geologic characteristics:
(1) they consist of large volumes of rock pervasively charged with oil or gas, and (2) they do not depend upon the buoyancy of oil or gas in water for their existence.

i think its too early to speculate of these things, tom kelly would be a great source to get an answer from, have you enquired why he cant answer your questions?

 

[megla]

hmm.. obviously the market thinks its interesting. I looked at the opening this morning and was disappointed to see about 2:9 buy:sell volume ratio, and now we are at 3:1 ratio.

 

[Agentm]

Adi have released this today

The "significant gas shows and multiple gas flares" reported during drilling provide further encouragement in terms of the possible existence of permeable natural fracture systems in this productive formation which is believed to extend over the Sugarloaf Joint Venture area of some 20,000 acres. The existence of any such natural fracture systems is likely to improve the potential productivity of horizontal development wells that intersect them. The operator’s plans to test the wells using different completion techniques will provide them with valuable information for the future development of the discovery.

i think as far as the jvp is concerned, the significance of the baker announcement is worth looking at..

again they are saying the chalks are flowing!! thats significant!! remembering also they are rich in liquids and also have high matrix porosity

now those flares and shows were significant also.. in their intensity and delivery.. the flares were not missed at all in that county and a few others,, and the gas shows were significant.. imho enough to stop them drilling!!

 

[resourceboom]

AgentM, check out todays announcement of a great result from NXS.
Their offshore Crux well testing at 50MMCFD and 2000 barrels condensate, constrained by equipment.

Now, how do we find a picture of the Baker flares to compare

 

[fflintoff]

And your point is what exactly? - that the sugarkane extends that far?

I suppose if Conoco started drilling off Craggy Island - you would report that as well!

Lets get back to reality shall we!

lol

ft

LOL! Best guffaw of the day!

Father Ted2 - 14 Jan'08 - 09:31 - 61278 of 61278


mpls

sorry that should have been was "hooks #1", and its the latest burlington application for lease in Dewitt at ~14000 depth (that would likely require a big rig)

Its a long way out from the kane but in line with it

ft

 

[Agentm]

AgentM, check out todays announcement of a great result from NXS.
Their offshore Crux well testing at 50MMCFD and 2000 barrels condensate, constrained by equipment.

Now, how do we find a picture of the Baker flares to compare

up until now the size of the flares were a "significant" part of the eme's previous announcements

i see the wells psi are real low compared to the chalks we are in.. i hope the pressure stays there and they get continious production ...look forward to the flow rates of the horizontals at sugarkane..

 

[Father Ted]

LOL! Best guffaw of the day!

Father Ted2 - 14 Jan'08 - 09:31 - 61278 of 61278


mpls

sorry that should have been was "hooks #1", and its the latest burlington application for lease in Dewitt at ~14000 depth (that would likely require a big rig)

Its a long way out from the kane but in line with it

ft

The distance from the kane is of no consequence. the interest is where the big rigs are going - and when they will be available again.

If the Baker rig had not gone to Hooks, the question would have been 'where did it go'.

ft

 

[Agentm]

The distance from the kane is of no consequence. the interest is where the big rigs are going - and when they will be available again.

If the Baker rig had not gone to Hooks, the question would have been 'where did it go'.

ft

imho perhaps than one well is being done at the hook locations.. currently there is only one permit.. but it was odd that patterson rig did not go anywhere for several months..

i dont see it as a chalks target, i think its more likely to be part of the massive exploration and development at runge.. which i believe is edwards..

further north from that is plenty of chalks activity..

father ted, what are your thoughts on the lack of interest in EME with 5 wells in the sugarkane?

 

[jackohelp]

imho perhaps than one well is being done at the hook locations.. currently there is only one permit.. but it was odd that patterson rig did not go anywhere for several months..

i dont see it as a chalks target, i think its more likely to be part of the massive exploration and development at runge.. which i believe is edwards..

further north from that is plenty of chalks activity..

father ted, what are your thoughts on the lack of interest in EME with 5 wells in the sugarkane?

it's probably this agentm, with my bits added in stars:

Technology Needs for U.S. Unconventional Gas Development
Final Report
Contract DE-RP26-04NT41817 TSK41817.211.01.05
December 2005

2.1.4 Low Permeability Carbonates
Figure 9 shows the major locations of low permeability carbonate plays in the Continental United States. The largest of these formations is the Austin Chalk, which runs from near Laredo Texas through eastern Louisiana. Other carbonate formations are found in West Texas, southeastern Ohio and southern New York. Wells in the Austin Chalk are currently yielding 1 to 3 bcf per well per year.
Figure 9 - Major Low Permeability U.S. Carbonate Plays Devonian/Montoya(Permian Basin)Austin ChalkTrenton/Black RiverMajor Carbonate PlaysDevonian/Plays
Evaluation and characterization of carbonate reservoir rocks, be they shallow or deep, low or high permeability, has been problematic.*** you're telling me***!!! For low permeability carbonates, the issues are most difficult, because subtle property changes that affect the flow properties of the reservoir units are below the resolution and capabilities of current imaging technology. Nonetheless, recent successes in low permeability carbonate plays in the Appalachian Basin, South Texas, and the Permian Basin have clearly demonstrated the potential of this resource.
One source of problems in understanding and characterizing carbonate reservoirs is the fact that, except for reservoirs where granular dolomites contribute to porosity and permeability development, tools and techniques that are successful in characterizing sandstone reservoirs do not produce reliable results in carbonate plays. This is because the major flow conduits in carbonate reservoirs are natural fractures.**have we hit a few!!** In the absence of any proven and reliable technology for fracture identification and characterization, well placement for carbonate reservoirs bears a high risk factor. Further, in the case of tight carbonates, gas stored in the fracture space initially flows at high rates, but production may fall off quickly as the flow from the tight pore spaces replenish the fracture space at a very slow rate. Reliable reservoir assessments may therefore only be possible after a relatively long period of time. The net effect has been that carbonate formations tend to be higher risk plays, thus discouraging exploration for the resource.*** and investors in eme!!

 

[Agentm]

jacko, your presenting information done on the low permiablity carbonates..

these chalks are untested in the horizontal, officially.. but we are uncertain of whats happening at kunde 1 and baker, did baker do a drill stem test to establish their ideas to flow the chalks open hole? they did say it tried to flow naturally during drilling operations! maybe theres an indication there?

remember these chalks are unique, they have an extremely high matrix porosity, and i am unsure of the measure of the permiability until they flow the wells, that will give the best measure of it all. it has yet to be established if they will flow without a fracture, kunde 1 is indicating they can flow without a natural fracture, so be cautious in judging the chalks too hastily.. imho all wells would produce without naturla fractures, i think the idea of fracing is to connect to those natural fractures and there by boost production into some amazing areas, its just the formation is overpressurised and the best at halliburton couldnt crack it open!! they will be back, i can assure you of that!!

all will be answered in the very very near term..

 

[jackohelp]

I realise this agent. I understand from Schmoker that there is an area of grey when trying to categorise between the two. i.e. it doesn't automatically follow that all continuous accumulation are low permeability but it does mention natural fractures and extremes of pressure either high or low. I have Put a lot of stuff on advfn on the subject in the last few weeks.

I like the way sweet spots are mentioned as they are in the geology documents i've been studying.

 

[Agentm]

i promised to post the TCEi leases that are running close, these leases are anywhere form may 2009 june july and sept 2009..

so in the next 12 months the tcei are going to be busy getting all those leases covered.. i am not commenting on which ones may or may not be part of the 20,000 acres out jvp is engaged in..

but none the less if this drags on for month after month, eventually someone has to start drilling and developing the play.. the way i see it, if kunde is commercial, and baker is and kennedy, would you want the leases around there to run out??

imho, the baker well is a brilliant well, the way it behaved and the flurry of remarks on it having shows, flowing and flaring with heavy mud, it is also interesting to think like they are, and imagine how well it may flow with no mud there trying to stop the formation from flowing!! hence the future for baker is to flow open hole!!

somehow i think as soon as kunde 3 is up and running the show will begin big time.. well thats what i am investing for in any case..

all imho and dyor

btw there are leases in the name of grace and also in TCEi up north a good 4 miles that run the same..!! and grace have done zip so far..

 

[fflintoff]

Broker report on EME Jan 2008.

Empyrean Energy PLC 32.00p Speculative Buy.

Empyrean Energy is in the middle of a potentially high impact 16 well drilling programme at their Sugarloaf project in which they hold working interests ranging from 6-18%.
The company's latest interim figures were inline with expectations. With respect to specific operational activity, it was announced that 5 wells drilled to date at Sugarloaf all have potential gas pay; each well is at a different stage of completion and production testing. News flow with respect to each wells potential commercial production is expected in the coming months in
addition to further updates as each new well comes online. The top zone out of three being targeted and tested at Sugarloaf is viewed to hold the most potential as it is analogous with the nearby Sugarkane gas-condensate field; this zone should represent the highest chance of success.
Meanwhile production continues at Margarita in which Empyrean holds a 44% working interest. 3
out of 6 wells during this project are now in production, an excellent achievement given industry
drilling statistics for wildcat wells are usually 1 success in every 12. Production to date from
Margarita since hook up in the summer has generated revenue of £198k.
The company reached target depth at its Ruan-1 well at the Bondi prospect however only thin noncommercial
gas sands were encountered here. Further testing of shallower zones will commence
once a more cost effective rig has been sourced.
With respect to the Eagle Oil Pool Project in California, the possibility of a potential horizontal
recompletion is being discussed although the timing of this remains uncertain. Progress at Glantal
in Germany is also being made as the company also announced in their interim update that
preparation to shoot further seismic to indentify potential drill locations for 2008 is underway.

Steady cash flow from Margarita will continue to underpin Empyrean's share price and
facilitate their continued operations as a going concern.
There is thought to be significant upside potential in the order of 100's of Bcf at Sugarloaf
should any of the target zones prove to be commercially viable.
Additional exploration and development potential exists at the Bondi and Coogee prospects
where Empyrean has increased their working interest to 20%. Coogee in itself represents a
potential 28-62 Bcfe target; success at either will add significant shareholder value.

Strengths
Steady cash flow from operations from
Margarita now underpins the company,
enough to cover operational expenditure.
Prospect of reserve upgrades from the
16 well drilling programme at Sugarloaf.
Plans to acquire new seismic at Glantal
define future well placement are ongoing
High gas sales prices will be beneficial.

Weaknesses
Oil and Gas E&P is inherently risky and
share price volatility can be significant in
response to corporate news flow.
There is an operational concentration
risk with only 3 producing wells
difficulties at the current producing
assets will have a significant negative
impact on cash flow.

http://www.hoodlessbrennan.com/stock-research-prices/aim-small-companies/