ADI - Adelphi Energy

[gdaf]

- will they frac the K1H and Kowalik now?
- what happens if (when?) one of the JVP partners runs out of cash, or goes into liquidation? Do the others have to up their share?

Basically, unless there's funding options that they are not letting on I think the future depends on Weston and

 

[gdaf]

sorry - this browser is acting up...

unless they have something going on with funding that they're intentially not letting on (why mention farm ins etc?) or they can secure funds from AWE, I think the future of this company depends on Weston and improved flow results from their existing wells. There's simply not enough in the kitty as it is, and not enough confidence to go forward without this.

 

[Agentm]

gdaf.. ask them.. ask awe and ask adi.. maybe you will clarity maybe you wont, but i dont look tp awe for anything myself..

whats important is what on the ground, weston.. its at the level where the logs from sugarloaf 1 showed huge spikes, 19500 is the zone..

the operator needs to be in that right zone and stay in it, lots of sampling done, which is what thye would have done in all wells, it will show them some data on where they are.. and reassure them of where to look for that play.. i certainly dont hope for 4000 feet of finding it and 2000 foot of "in the zone" i would expect the well to be in the zone at the front end of the well this time..


Adelphi Energy (Adelphi) is pleased to provide the market with an update on operations within the Sugarloaf AMI.

Weston -1H

Adelphi has been advised by the operator, Texas Crude Energy Inc (TCEI) that since the last report the well was drilled to a depth of 11,659 ft where intermediate logging and sidewall cores were taken. Drilling then recommenced and the hole is currently at a depth of 11,950 ft with operations ongoing.

The well is targeting the upper chalk interval that has been reported to have successfully produced gas and condensate in three wells in the adjacent acreage and is currently on production at the Kowalik -1H well.

 

[gdaf]

What about income from the two wells producing? What is ADI's share. No mention of this in the report?

 

[Agentm]

What about income from the two wells producing? What is ADI's share. No mention of this in the report?

again, ask adi gdaf,,

or go to the rrc site, look up the well, look up production and then calculate it through. make yourself a spreadsheet on excel if you like and punch in the monthly numbers.. my database tell me a few months later the sale price of the gas and oil on the wells.. but as you know we all need to dyor..

 

[barney]

weston a real clincher for all the jvp partners..

talk about expensive learning curves..

this will shake the less risk prone out ..

all imho and dyor..

Spot on there Agent !!

We may well see sub 10 cents before we see 20cents+ now, but just to keep a perspective on what a bear market can do, here is a chart showing the relative volume areas that Adelphi has been most traded/invested at ........... The price could keep dropping, but the fact is, that those selling into these prices are in the minority ...... those buying, if it eventually comes good, will be better off than most ............ Like everyone else, I wish I'd waited ..... but hindsight is a "useless commodity" ............. Sit tight .... grin and bear it ...... or sell to the bargain hunters .....

 

[speculator101]

Hi all.

Dire times indeed.
Would anyone be able to guestimate how much ADI's Yemen holdings would be worth to AWE. Considering AWE is already exploring Yemen.
If you care to read AWE's AGM its mentions that it has lots of capital to finance both further exploration, development and bolt on acquisitions... – Oh, it is also paying out a dividend of about $50 million – which could have been used to buy ADI.. So im thinking a T/O is prob not on the cards. AWE already has %30.
Anyway.

ADI doesn’t seem to have too many choices right now.. funding wise.
So here’s hoping AWE see a bright future for ADI.

IMHO.

 

[Lucky_Country]

Sell down on Yemen looks on the card but if Weston comes in as a great revenue earner all may fair well.

If they can get a substantial cash flow from Weston I expect them to go back to Kowalik and Kennedy and give them the best shot of increasing flow rates on these well for little as can be outlayed.

Kowalik seems to be being watched very closely with the jvp not letting to much information released.
All is not lost infact chances of success seem to be growing finance is the problem.

I must admit this waiting and watching the shareprice is really depressing me although I remain optomistic !

 

[seasprite]

Weston -1H
Adelphi has been advised by the Operator Texas Crude Energy Inc (TCEI) that at 6am Texas
time on 2 December 2008 the well was at a depth of 12,480 ft with the build section now
complete with an inclination of 70 degrees. The well will now be drilled down into the chalk
and the final casing string set before commencing the horizontal section.

 

[gdaf]

Lets hope next week's report includes a statement that flaring has been observed while drilling the horizontal. There is so much riding on this well now for ADI. All eyes will be on this part of the drill. We're close to the zone.

 

[Sunburnt Land]

Now let's just hope they don't go and do something stupid like losing the drill string aka Kowalik.

 

[seasprite]

it appears to me an ex director Patrick O'Connor has been selling up through his interest in SG Growth Equities Limited and latest sell down by Beech Grove Pty Ltd to take both of them off the top 20 list. Unfortunately his other interest Cenotaph Nominees remain in the top 20.

Sooner he has gone the better.

 

[Agentm]

i believe sg growth was an investment company, that had holdings in various places, if i recall you needed half a mill to tip into it. perhaps they have had stressed investors withdrawing just as anyone else has had on their share registry? imho any investment company can have geared investors and normal cashed up investors, and people withdrawing is probably not unexpected and very common, imho its not unusual for the top 20 holders to change around, whats been very unusual about adi is that by and large the top 20 have had the same familiar names for years now. and that may be true of all the aussie jvp's.

sunburnt, all i have asked for christmas is for a straight lateral, i hope santa understands my letter to him.

 

[Lucky_Country]

Not many sellers and real move will see the sp move substantially higher.

Weston 1 may be close to bringing some kind of results lets hope they are positive.

Wheres my Xmas present ADI ?

 

[Sunburnt Land]

The only Adelphi that will be putting smiles on faces this Christmas is the ham sitting on the table at lunchtime.

 

[Agentm]

Weston -1H
Adelphi has been advised by the Operator Texas Crude Energy Inc (TCEI) that on 9 December 2008 the well was at a measured depth of 13,013 ft and has been drilled into the Austin Chalk with an increase in background gas. The final casing string is now being run in the hole and once cemented, preparations will take place for the drilling of the horizontal well section.

The well is targeting the upper chalk interval that has been reported to have successfully produced gas and condensate in three wells in the adjacent acreage and at the Kowalik - 1H well.

 

[gdaf]

The is a good anouncement IMO. It shows we're in saturated rock. The horizontal section will now be drilled, and hopefully we'll be heading straight into a fractured area. Can we get more than the 1500ft at kowalik? Let's hope so. What have they learnt from their experience there?

The market has priced in comeplete failure in Texas, and basically writes off any chance that ADI will get anything out of their other plays, including a year free carry that may well turn out to be very productive. 10c looks pretty appealling if you've got an appetite for risk (.01% of the population in this environment?)

Better times ahead? Let's hope so.

 

[blues]

EKA doing a capital raising and it will be interesting to see if ADI are right behind them. Need a good result at Weston.

 

[JOHAUD]

EME interim results

http://www.advfn.com/p.php?pid=nmona&article=29856931&epic=EME

contain some useful info.

 

[Agentm]

HIGHLIGHTS

* All nine wells drilled to date at the Sugarloaf Project have encountered
hydrocarbons whilst drilling and five have successfully tested gas and condensate
* Production commenced from three wells at the Sugarloaf Project with two already tested wells to come on to sales shortly
* The Weston-1H well at the Sugarloaf Project has reached the target zone and is currently drilling the horizontal with elevated gas readings being observed upon entry into the target zone
* Appointment of Finance Director, John Laycock and new Nominated Adviser and Broker, Blue Oar Securities Plc

CHAIRMAN'S STATEMENT

Overview

........Two more wells commenced during the reporting period in Block A. The first of these wells, TCEI JV Block A-4 well (Baker 2), has a horizontal section in the upper pay zone (Austin chalks) , and is now in the process of being connected to sales. TCEI JV Block A-5 well (Marlene Olsen) commenced drilling during the period and is a vertical well targeting all three potential pay zones (Austin chalks is upper zone). This well successfully reached the target depth and intersected all three potential pay zones and is due to be tested shortly. It is envisaged that the operator will test the middle pay zone and lower pay zone (eagleford) , before testing the already proven upper zone (Austin Chalks) and possibly combining production from all zones if possible and successful. The Middle and Lower Pay Zones are also called the Eagleford Shale which is an active new Play in South Texas............

OPERATIONAL REPORT

The Sugaloaf-1 well was drilled and following analysis of logs showing the presence of at least a 92 feet gross column of gas, Empyrean entered a second agreement with TCEI for an additional interest in the next 16 wells to follow Sugarloaf-1 on Block B or the adjacent Block A.

To date, a total of seven wells have been drilled with one currently drilling as part of the 16 well deal. All wells have encountered hydrocarbon shows while drilling and three have already tested positively for gas and condensate. Four of these eight wells have been spud since May 2008, being TCEI JV Block A-4(baker 2), TCEI JV Block A-5(marlene olsen), Kowalik-1H and Weston-1H.

The operations in progress are as follows:

BLOCK A

TCEI JV Block A-1 (Empyrean Interest: 7.5%) (Kunde 3)

The TCEI JV Block A-1 (kunde 3) well was brought into production and commenced flowing to sales at an initial seven day average production rate of
2.6 million cubic feet equivalent gas per day (10:1 conversion on condensate value). The well was flowing from 900 feet of perforations and the operator intends to add an additional 1800 feet of perforations to provide some 2700 feet (approximate) of perforations and also fracture stimulate the additional interval. These operations have commenced.

TCEI JV Block A-2 (Empyrean Interest: 7.5%) (kunde2)

The TCEI JV Block A-2 well is being used to monitor the fracture stimulation operations of the A-1 well following which it will be completed for production itself.

TCEI JV Block A-3 (Empyrean Interest: 7.5%) (baker 1)

The TCEI JV Block A-3 well (baker 1) was spudded on 24 October 2007.

On 14 April 2008 Empyrean was finally able to announce the initial test results of a significant gas-condensate discovery. Initial flows through a 12/64 choke were measured at 1.9 million cubic feet gas per day with 460 barrels of condensate per day. Based on present day prices for gas and condensate this would be equivalent to 6.5 million cubic feet of gas
equivalent per day.

This open hole test has been conducted without stimulation.

A-3 (baker 1) has been flow tested then "shut in" as part of the normal reservoir and production engineering procedure. During the "shut in" period the operator has been finalising the design (based on the TCEI JV Block A-1 well (kunde 3)) and construction of production facilities and pipeline connection. Condensate will be separated in situ and trucked to the appropriate markets. As of 4 December 2008 the connection operations are still in progress.

TCEI JV Block A-4 (Empyrean Interest: 7.5%) (baker 2)

TCEI JV Block A-4 well (baker 2) was designed to test the same "Upper" zone of the Austin Chalk as those Block A wells in production, being TCEI JV Block A-1 well and TCEI JV Block A-3 well. (Kunde 3 and Baker 1)

The well was spudded on 4 July 2008 and reached total depth of 12,756ft in the vertical pilot hole on 26 July 2008. At least 300 ft of gas shows were encountered during this phase of drilling.

The horizontal phase terminated at 15,084ft (measured depth) on 7 September 2008. Sufficient pay had been intercepted in the Austin
Chalk reservoir and this was considered by the operator to provide sufficient potential for a good commercial outcome. (damn short well but in the good stuff)

Preparations for production testing commenced at the beginning of October 2008, and on 31 October 2008 it was announced that A-4 (baker 2) had flowed initial rates as high as 2.5 thousand cubic feet of gas per day and 260 barrels of condensate per day, equating to approximately 5.1 million cubic feet of gas equivalent per day.

Preparations for sales pipeline connection and production facilities have already commenced. (correct)

TCEI JV Block A-5 (Empyrean Interest: 7.5%) (marlene olsen)

The well was spudded on 29 September 2008 and reached a total depth of 12,469ft on 27 October 2008.

It is a vertical well which had hydrocarbon shows in all three zones, Upper (Austin Chalk), as well as the Middle and Lower Pays which are called the Eagleford Shale by on-trend operators.

The operator is at present assessing the well data before deciding on a testing and completion procedure. It is envisaged that the operator will test the Middle and Lower pay zones, (the Eagleford Shale), before testing the already proven Upper Zone and possibly combining production from both zones if possible and successful.

BLOCK B

Kennedy -1H (Empyrean Interest: 18%) (eagleford well)

The well spudded on 17 September 2007 and after kicking off from the vertical at 11,845ft, the total depth of 16,750ft (measured depth)
was reached on 12 November 2007 was 820ft short of the original proposed measured depth of 17,570ft.

A fraccing operation was carried out on 14 May 2008. A total of 95,000 lbs of sand and 5,182 barrels of fluid were injected under pressure into four sets of perforations over an approximate 600ft horizontal interval. Initial flow results of gas condensate and fracc fluid recovery were announced on 25 May 2008.

An impending second fraccing operation was announced on 23 June 2008 and carried out on 3 July 2008. An additional three sets of perforation intervals, each 3ft long, were interspersed between the original 600ft perforated
interval prior to the introduction of 100,000lbs of high strength proppant. The fraccing operation was terminated prematurely due to the high pumping pressures encountered and only 50% of the proppant entered the formation.

After cleanup operations, testing of the well resumed on 15 July 2008. The initial, unstabilised rates of 425 thousand cubic feet of gas per day and 106 barrels of condensate per day reduced, after intermittent slugging, to 200-300 cubic feet of gas per day and 46-107 barrels of condensate per day.

Since at least 5,000 barrels of fluid had not been recovered after the fraccing operation, a coil tubing unit was mobilised on the 18 July 2008 to displace the fluid. Some additional fluid was recovered but the flow rates
remained the same. It has been estimated by the operator TCEI that the production originated from only 17ft of perforations in the bottom section of the 600ft horizontal section.

On 31 August 2008 it was announced that Kennedy 1H was being shut- in while production and tie-in facilities were completed for eventual
connection with the nearby transmission line. Production recommenced on the 2 October 2008 at a rate of 200 thousand cubic feet of gas per
day and 60 barrels condensate per day.

This is the first time production has originated from the "Middle" pay zone, (eagleford) and therefore augurs well for recoverable reserve considerations. A decision whether or not to perforate and fracture stimulate the remaining 3,000ft of horizontal section will be made following the analysis of production performance.

Kowalik-1H (Empyrean Interest: 18%) (austin chalks well)

Kowalik-1H was spudded on 4 July 2008 and was designed to test the "Upper" pay zone of the Austin Chalk over a 6,000ft horizontal interval. It is located 5 km north of Kennedy-1H and is on trend with the Block A producing wells TCEI JV Block A-1 well and TCEI JV Block A-3 well.

The vertical pilot hole reached a total depth of 11,970 ft on 11 August 2008. The horizontal phase was successfully completed and on 22 October 2008 it was announced that the well had reached a final measured depth 16,483ft
(equivalent to approximately 4,600ft of horizontal section). Although the original plan was to penetrate a 6,000ft horizontal section, it was
considered technically prudent to stop at this depth. There had been significant gas shows throughout the section, often reading more than
2,000 units with attendant flares on surface.

Testing operations commenced on 3 November 2008. Initial flows measured 937 thousand cubic feet of gas per day and 321 barrels of condensate per day. It has been interpreted that most of this production is from approximately 1800 feet of the horizontal well.

FJ Brophy BSc (Hons)
Technical Director
12th December 2008