ADI - Adelphi Energy

[estseon]

kennedy 1h well was tested, and last announcement was that TCEI will put it on production, very marginal rates of production due to well not being optimally completed for the chalks formation ..

the plan is to frac it again later this year or early next year..

focus is on an upper chalks completion open hole..

agentm,

does that mean that they will re-drill part of the lateral? Or is it that part of the lateral drilled was in the upper chalks?

Also, I've noticed that they have been referring to "upper chalks" and "lower chalks" instead of zones 1, 2 & 3. Does this mean that they have a revised view of the formation? Or do they still see the formation as having a potentially productive middle zone of about 120ft thickness?

Rather testing questions but I just wondered whether you had a view based on the slight change of language used.

 

[seasprite]

estseon , I Just found in 27 May presentation that they drilled Kennedy 1H too low in the lower to mid chalk instead of the Sugarkane productive top zone. One of their options is to move up hole and as you say drill another lateral to test another zone. see pages 16 & 17. Looks like Sugarloaf may add significant value to ADI . 600 BCF mean potential.
Bring it on .

 

[estseon]

seasprite,

the 8th September presentation:

Kowalik targeting.....
10mmcfgpd and 2,500bcpd ($260,000 per day)
Payout in 2-3 months
10 BCF + 2.5mmbc with 15 years reserve life
NPV US$70mm (US$2/mcfe)

Previously, they had suggested 36 wells for the Sugarloaf. Not sure how much acreage acquired AFTER that suggestion.

Focus on the NPV. If, say, 30 wells achieve that Kowalik target (there will be the need for extra discounting anyway because they won't have them all drilled within 12 months):

US$70m x 30 x 20% = US$ 420m discounted value of risked cash flow.

I'd agree that there would appear to be a bit of upside potential.

ADI must be pretty confident to put figures like that out in a public document.

If Kowalik comes in at the figures 'speculated' by ADI, and IF the market buys the ADI figures, we could see the price up 50% or more.

Their figures suggest a revised view of reserve potential.

 

[Hatchy]

Up 50% - that's conservative isn't it?

I think I speak for everyone here when I say - I would like to see it up at least 100% after the next 2 wells.

 

[Agentm]

estseon

thanks for taking the effort to put some figures down..

on a sniff of success at the deep hosston sands target ADI speculated to over $1, that deep 21000 foot target in sugarloaf 1 was said to be 800 BCF (1.5 TCF)



638 acre spacings will get you 36 wells..

36 wells @ 10 BCF + 2.5mmbc with 15 years reserve life


100 acre spacings will get you 230 wells..


oh, and 40 acre spacings, which is what Conocophillips is talking about doing, will get you around the 575 wells region for our AMI sugarloaf 23,000 acres..

if TCEI is allowing ADI to do all calculations based on 638 acre spacings in their presentations then so be it.. i would think that it would be impossible to drain a chalks formation on that type of spacing, imho the region of 100 acre spacings on average is already more than likely, but 40 acre spacings is probably closer to what the operators know is needed in the chalks, as evidenced already in the Kunde 3 & 4 wells and baker 1 & 2 wells..

becomes staggering, and even more so when you have Conocophillips looking to do over 250,000 acres in their Cote d'Or project on this same austin chalks play both north east and west of our acreages..

perhaps a touch more than the 50% latitude in the future share price could be expected.. who knows, maybe no one owns a calculator..?

 

[estseon]

Hi agentm,

the 50% was just on the back of Kowalik. You know the ASX better than me. Perhaps the SP will take off at that point when they do arithmetic based on these figures and that published plan. ADI are saying 35mmcfepd.

35 x 330 (say production year) x 15 (years - it won't flat line but let's see what the figure produces) x 36 (number of wells) millions cfe.

That comes out at 6,237,000 million cfe. In non-scientific terms, 6.24 trillion cfe.

Production is bound to decay, so it wouldn't be this much.

You are saying that the 36 wells over the acreage (working out at 1 per square mile) would be just the start. This must be correct. The rock has low permeability.

Does 1 well define a field? or 1/10th of a field? I was just suggesting that the ASX might like to see some evidence of replication of results before extrapolating them.

What of total reserves? EME has said that there are 3 zones of thickness 80ft, 120 ft and 50 ft. Perhaps the formation is not uniform over the acreage. But a total of 250ft thickness over 36 square miles at, say, 7.5% porosity suggests around 1.5 cubic miles of gas (crushed under huge pressure - 80 atmospheres) & condensate. Convert that volume into barrels of oil (it isn't all condensate but it will give a top end theoretical capacity figure) and it calculates out at 21 billion.

A fantasy figure, obviously.

What about the volume ratio of gas/condensate? I don't know the pressure at which the projected 10mmcf is 'measured' at. Say, 1 atmosphere. The volume at 80 atmospheres will be 125,000cuft = 3,500 cu metres. The volume of 2,500 barrels will be 400 cu metres, so say 10% of the volume is condensate. That's 2 billion barrels with the gas in addition.

More fantasy figures.

 

[solomon]

Hi estseon, thanks for the posts, I realise they are fantastical, but even so, they have only added to my excitement for ADI, 5% of those numbers would bring us all great joy.

I feel like a kid waiting for Christmas, I know there's going to be something great under the tree and I just can't wait.

 

[Agentm]

estseon

each well going in determines the extent of the field, you get p10 p50 p90 reserve calculations, the more you explore and infill the higher your possible reserves and probable reserves go,,

we know this is a stratigraphic play.. so it will go a long way, i think the initial well already proved hydrocarbons, the second well confirmed they flowed, and this kowalik well, the third well in our acreages, is likely to be put on immediate production and demonstrate commercial flow..

subject to all going well at kowalik, ADI is about to be looking at its first of hopefully 4 commercial wells in a row, in a greenfield play with what is no doubt a staggering play in terms of size and potential..

news should come soon on how kowalik progressed this last week.

 

[Agentm]

Kowalik-1H

Adelphi has been advised by the operator, Texas Crude Energy Inc (TCEI), that at 6am Texas time on the 23 September, 2008 the well had reached a measured depth of 14,385 feet, which equates to approximately 2,500 feet of the planned 6,000 feet of horizontal section within the Austin Chalk.

The well has continued to produce gas whilst drilling, which has led to sustained flaring activity. In addition, when routine operations such as connections reduce the downhole pressure, larger flares have been observed on surface, indicating a response to drawdown**. Elevated gas readings of approximately 1,500 units have been consistently measured during the drilling of this portion of the horizontal section.

Whilst encouraging the commercial significance of these gas shows and flares will not be known until the well has been flow tested.

The horizontal section is targeting the upper pay interval that has been reported as successfully producing gas and condensate in three wells in the adjacent acreage.

** in essence, this means that when operations such as the addition of drillpipe require the circulation to be stopped, this temporarily reduces the pressure downhole and causes additional gas to influx into the well bore which ultimately produces the larger flares at
surface.


the well has only gone 550 feet since last week, so very very slow going, which is remarkably smilar to the story in the conocophillips wells, where they had to stop drilling eventually.

right now, hearing this news, i think you would have to be optimistic.. perhaps even slightly elated.. this is very promising indeed,, flaring all the time is excellent, and then larger flares on changing to a new section of pipe really indicates the well is wanting to flow in a big way..

good luck to all holders..

 

[seasprite]

I compared my records to ADI's latest Top 20 shareholder list. It appears the majority have increased their holdings presumably from the rights issue while 3 or 4 have remained at their previous amount. ARQ energy (AWE) remain No 1 at 39,550,000 as of 19 Sept 08

 

[Agentm]

a few months ago 500,000 units qualified you for the top 20,, now you need more than 700,000.. one top 20 increased by 1,000,000 if i remember rightly..

the announcement today is pretty sensational imho.


"The well has continued to produce gas whilst drilling, which has led to sustained flaring activity"

great news, great progress report.

 

[barney]

a few months ago 500,000 units qualified you for the top 20,, now you need more than 700,000.. one top 20 increased by 1,000,000 if i remember rightly..

the announcement today is pretty sensational imho.


"The well has continued to produce gas whilst drilling, which has led to sustained flaring activity"

great news, great progress report.

Agree Agent ..... An excellent progress report indeed ............. The interesting thing is, if this report had come out after they had drilled Sugarloaf, or Kennedy, the SP could have been almost off the map .............. I think most average punters (Of which I am definitely one), will need something "written in stone" by ADI and TCE , to entice the bigger punters into the fray, before the Sp will reach its full potential ................ I think the patient will be rewarded, but I also think the patient might need to be (extra) patient .................... Just the same, I find it odd that people are selling their shares at below the rights issue price after this kind of news .......... Then again, there are a thousand reasons why people need/want to sell their shares ................ I don't have a lot of shares compared to most, but I'll hold what I have left until the gas and oil dries up ..................

I mean if COP and TCE are happy to invest millions of dollars into this area, the least I can do is hang on to my few thousand $ worth ..........

 

[Agentm]

Agree Agent ..... An excellent progress report indeed ............. The interesting thing is, if this report had come out after they had drilled Sugarloaf, or Kennedy, the SP could have been almost off the map .............. I think most average punters (Of which I am definitely one), will need something "written in stone" by ADI and TCE , to entice the bigger punters into the fray, before the Sp will reach its full potential ................ I think the patient will be rewarded, but I also think the patient might need to be (extra) patient .................... Just the same, I find it odd that people are selling their shares at below the rights issue price after this kind of news .......... Then again, there are a thousand reasons why people need/want to sell their shares ................ I don't have a lot of shares compared to most, but I'll hold what I have left until the gas and oil dries up ..................

I mean if COP and TCE are happy to invest millions of dollars into this area, the least I can do is hang on to my few thousand $ worth ..........

hey barney,,

firstly, lets see if they make td on this well,, imho its getting pretty hard,..

cop and tcei have not spent millions, but billions..

Cote d'Or is not a figment of my imagination, my research is correct, and the jvp cant discuss the project.. but that will change soon.. very soon..

no one is downbeat on kowalik right now, thats for sure.. it wants to produce while drilling, thats unbelievable! great prices right now, but no volumes of any note..

i am with you, i will hold, gladly, theres nothing i know thats going to better this one.

 

[hashertu]

Agentm.
What are your thoughts about the slow rate of drilling at Kowalik?
If I was to hazard a guess, it would include:
Don't want to damage the bore hole.
Don't want to get anything stuck.
Possibly steering between fracture clusters.
Do want to get to 6000ft horizontal because it gives the most economic return on drilling costs.

 

[Agentm]

i would tip mechanical reasons and also formation.. bit of both..

its all in all abrilliant drill so far. we can only speculate on the reasons but i would be glad to see a 6000 foot lateral if its possible..

 

[bazollie]

G'day to all of the ADI holders and followers.

I read every day this thread and post occasionally on it as well. One thing that has been catching my attention is the number of "views" this thread has attracted ( in excess of 300,000!)

I would be surprised if this thread hasn't the greatest number of views on this website. Maybe the Moderators could comment on this one!

Now your guesses would be as good as mine as to why so many views- Is it that the visitors to this site start at the beginning of the Alphabet and can't get past ADI? Is it that this stock has the potential to be a Company Maker for the smaller JVP's involved in Sugarloaf?
Or is it the fact that there is so much great information and research that is posted on this thread!

I know and have seen some great information, some "sledging and downright verbal attacks " on some of the posts on ADI.

I also can see that there is a nucleus of True Believers ( you know who you guys are ) that have been in the stock for same reason as me , build wealth over time , based on a good story with great potential.

There have been times where I could have lost patience and bailed , but being a long term investor and not punter ( I work full time and can't risk punting ) I couldn't bring myself to do this.

The way I see it, the JVP companies , must surely have a better understanding of this AMI they have , and the risk / reward ratio that this play offers must surely be a great reason to stick with it.

The volume of stock changing hands is minimal in the scheme of things and I see evidence that the Top 20 seem to be accumulating ever so slowly. I would be interested to see what the top 40 would hold.

I would be very hesitant to sell any of ADI at the moment , as I believe that they must be getting so much closer to really understanding what they have under ground at the moment. IMO and DYOR etc.

I know that we all have reasons to invest and DYOR etc. but I am still hanging on , and have been accumulating for the last 12 months or so.

I await in anticipation for the next 3 months as these 3 months could clearly be the most exciting of ADI and the JVP's.

Good luck to all holders and new investors,

Regards
bazollie

 

[Hatchy]

What a good time to add a few extra's to my holdings. I agree with the sentiments here earlier - had the latest announcements come say this time last year - we'd all be a bit happier. I guess the low volumes can offer some assurance, that people are holding this stock for when the storm is over.

I'm just not sure the storm has finished yet.

Hold people hold!

 

[Lucky_Country]

Just with the general tone of ADI announcements moving from the conservative approach to the seemingly more confident tone is a good sign imo and could not ask for a more upbeat assesment.
Kowalik looks destined to be a producer what flow rates is now the real question.

 

[Agentm]

Cote d'Or keeps getting more attention from conocophillips, this latest job ad shows more detail, the highlighted regions are extremely interesting to me.

http://www.simplyhired.com/job-id/lqbq2iry2y/cote-d-jobs/


This play is one of ConocoPhillips' largest global exploration projects, with planned 2008 investment in excess of $100 MM

Cote D Or Exploration Geologist - 005WE

Description

Company Overview

ConocoPhillips is an international, integrated energy company with operations in nearly 40 countries. As the third-largest integrated energy company in the United States and fifth-largest refiner in the world, ConocoPhillips' goal is to deliver energy in a safe, environmentally and socially responsible manner. Approximately 32,600 ConocoPhillips employees work worldwide to consistently deliver top performance and value to maintain the company's global market position. Employees' individual talents and strengths combine to create a diverse and energized workforce within ConocoPhillips. Headquartered in Houston, Texas, the company had $178 billion of assets as of December 31, 2007.


Description

General Responsibilites:


Responsible for participating and leading our company's exploration efforts within the Lower 48 Region's Cote d'Or carbonate-dominated resource play. This play is one of ConocoPhillips' largest global exploration projects, with planned 2008 investment in excess of $100 MM. The Cote d'Or Exploration Geologist (or Reservoir Engineer, depending on posting) with spend the majority of time creatively assisting the exploration drilling campaign, employing multi-discipline and state of the art technologies, to test the commerciality of the quarter million acres of land we have already acquired to date, and also direct where additional leasing and opportunities should occur. The successful candidate will hard-line report to the Cote d'Or Exploration Manager and the Manager of the Cote d'Or Project.


Responsibilities

The Geologist will have the ability to:

Participate in an unconventional gas multi-disciplinary team that performs subsurface technical evaluations to determine exploration drilling potential in the Cote D'Or asset.
Provide an integrated geologic model and assessment of unconventional assets through characterization of producing and non-producing areas.
Participate in an exploration strategy that requires the inception of ideas to the implementation and execution of an aggressive drilling program.
Display strong organizational skills that will allow for interpretations and assessments to be available for presentation.
Become knowledgeable in unconventional gas concepts and integrate leading technology practices into capital program to promote commerciality.
Evaluate and high grade opportunities to grow asset position.
Identify prospects and propose drillable location through a peer review process.
Learn to develop detailed well plans and fully supporting an aggressive drilling program within a multi-discipline team.
Take part in an aggressive exploration drilling program and become exposed to portfolio management and coordination of multi-discipline activities that includes land, regulatory, commercial and engineering functions.
Determine resource and reservoir estimates; prepare structure, isopach, and net pay estimates of prospects in regional and target exploration areas.
Contribute to the Gas in place/Resource assessment of both regional and prospect areas for Exploration Inventory Database.
Support the development of the Long Range Plan, Budget, Capital Outlooks and SLT presentations.
Research, evaluate and integrate multidisciplinary data to create new lead areas and prospects.
Interpret digital and rastor logs, rock property and chemical analysis, sorbed and pore gas content evaluation.
Conduct detailed petrophysical analysis of open hole log data.
Knowledge share with Development Team and efficiently transfer information to the team as the exploration program matures.
Knowledge sharing with the Global Unconventional Gas Team that will advance ConocoPhillips position in becoming a leader in unconventional resource plays.
Monitor industry activity to gain insight to competitive trends and practices.
Provide continuous improvement in both the execution and planning phases of the business plan.
Knowledge share and mentor less senior staff and/or interns.
Become a geologist that has knowledge of the emerging unconventional gas resource plays and has the ability to implement and execute an aggressive drilling program.

 

[estseon]

So, most of whoever matters operating in the region is being told all about it but EME remains a silent partner bound by a confidentiality agreement unable to say a word about what a lot of people will be talking about. That makes sense. I can't imagine that thsi information drought can last very much longer.