ADI - Adelphi Energy

[stereo21]

...and from Sugarloaf (EKA).

Sugarloaf-1 Well Testing Program Preparations continue as planned for the upper Hosston fraccing program. Further ASX releases in relation to the Sugarloaf-1 testing program will be made upon any material developments and results from these tests.

Participants in the Sugarloaf-1 well are: Eureka Energy Ltd 1 12.5%Texas Crude Energy Inc (Operator) et al 2 41.5%Aurora Oil & Gas Limited 20.0%Adelphi Energy Ltd 20.0%Empyrean Energy plc 6.0%...

 

[Agentm]

they talk of potential production testing it already!!

must have had some kick!!!

 

[tomcat]

Good news...so about another week to TD and then the wire-line logs should be run.

 

[cicak_kupang]

Looking ahead at NT, i'm wondering if we will have to wait for a work over rig for the perf/fracc prog, just like in SL,or if things are already in place/sourced so they dont have to wait around as in SL? Interested to note that the 70 ft of gas shows was not released to the market at time of show, not price sensitive, i think not, more likely acerage sensitive!!! All been played down again, wow, id find that hard to believe....

 

[Broadside]

Looking ahead at NT, i'm wondering if we will have to wait for a work over rig for the perf/fracc prog, just like in SL,or if things are already in place/sourced so they dont have to wait around as in SL? Interested to note that the 70 ft of gas shows was not released to the market at time of show, not price sensitive, i think not, more likely acerage sensitive!!! All been played down again, wow, id find that hard to believe....

they have proved an apt pupil of TCO on how to manage their announcements

 

[maverick11]

No gas ppm or gas show announcements, just the bare minimum...

I would have thought being a different joint venture they would have been more liberal with their announcements. Seems ADI are running the show :

 

[Agentm]

same state (Texas) .........same rules...

no letting the neighbours know what you have also means the shareholders dont get anything,, no pressures, depths, no details what so ever..

I bet the private interests are getting full details.. much as the private interests in the SL are through couchy.. Because the announcements have to be public knowlege the australian investor is kept totally in the dark.

i doubt you could convince any operator that you wanted to be on board a texas well without a guarantee that nothing about the well would go public..

GDN is an example of different rules to a different state and different conditions.. you get a massive amount of info and you cant complain (except for the one promise to disclose wirelines which never happened)

I see the term elevated gas readings used often in wells requiring non disclosure.. it appears to be a well used term.. regardless of the term used, the potential for production testing being mentioned even before wireline is completed shows me that the readings are being taken seriously.

for me its heartening news.. if they announced it outside the mid weekly report then the market would have interpreted it as a significant find, and that would have been irresponsible, i think doing it mid weekly and putting in an unessesary remark over production testing is indicating a lot of confidence.


all imho and dyor

 

[bazollie]

I know this is the Million Dollar Question , but is there any theories on the time frame of determining if there is a commercial flow of gas in the Primaries of SL??

 

[EEE]

In ADI's announcement on 29/01, they said a plan had been accepted to test the primary Hosston formation target (no word of secondaries) and that it would start in two weeks.

This takes us to a start date of 12/02 (possibly before) and with testing expected to take up to 2 months, I would imagine everything should be done and dusted on the primary by 12/04/07

And then onto the secondaries

Anyone please correct me if I'm wrong

 

[Agentm]

very interesting... commercial flow??

i understand the news we have is limited. There was a lot of leaked wirelines that have been passed around the globe, I have seen plenty of opinion on them.. My impression is that the well was always to be a closed well, no news until after the wirelines and possible fracing and flow testing. That policy remains on the secondaries, where no information has been passed onto the market at all, we are told that none will be released until after the fracing of the primary.

So with little data the average investor already in the share cannot guage the actual value of the share currently due to the closed well policy. its very possible people selling today are not aware of the successes in the secondaries, and the information being held back still today is potentially keeping the sp at a very low value.

only the bearest minimum of news that just passes the ASX reporting requirements has been released. For the JVP's its a constant battle of pleasing the operator, and not impeaching the ASX rules and regulations.

so back to commercial flow..

for all we know the chalks had commercial flow, even without fracing, couchy reported the mud was flowing back up the well,, that is really crazy pressure.. they had a very powerful rig and very powerful pumps, so they handled it easy.. perhaps other rigs may have had a blowout?? but clever reporting has limited the ability to determin anything.. i consider the chalks to have had commercial flow without fracing on the basis of couchys remarks..

for the lower hosston, they have declared in the last weeks they didnt see flow that warranted immediate fracing..

they have perforated the upper. and yesterday announced the fracing was to commence. the question of whether the upper had commercial flow or not is not technically important. 90% of wells are fraced in texas.. the geology is such that you dont just drill and plug into a pipeline. the gas is trapped in geology that usually doesnt give immediate commercial flow. but many many wells flow commercially after fracing.

I doubt they had commercial flow at the incredible depth they are at. the pressures and temperatures are extreme. I have seen on other forums that some JVP's have declared to some people that the geology they were after, what they modelled their well to be, came up exactly as expected. Sl isnt a guess, its not your usual well, its a world class well with 15 years of planning before it commenced. so the TCO operator is obviously pleased with all the progress, the seamless drilling, and the reports i see that the drilling models are exactly as expected means we have every right to be very confident in viewing the primary as a legitimate candidate for being commercially successful.

when the wirelined, they took samples, so they can lab test and analyse the soil and its structure porosity and permaibility. They can model this too,, when a frac team arrives at a well your at the serious end of business, they are expensive, and an operator is not blowing millions on a useless exercise. My view is that the primary is not at all capable of producing commercial flow as is and that goes for 90% of wells in texas... my view is that the flow they had, the geology and the characteristics of the soil is such that fracing is very probably going to produce exactly the commercial flow they were after.

if they didnt get the exact conditions they wanted, and for the massive size and expense of the drilling 50 wells deep into a play like thgis, you dont frac unless the conditions for total success of the entire field is potentially the outcome..

so the answer to million dollar question, imho is that they will not have commercial flow in the upper hosston until after fracing.. and as they frac each zone, they will know immediately after doing the first zone whether they will move onto the second or third or forth zones etc etc... each zone will be tested and i think operation and continuation may be assessed day by day....

IMHO i think each day the fracing continues indicates a stronger and stronger case for commercial success on the primary.. any failure on fracing early in the program would in my view create grounds for reassessing and cost cutting. they wouldnt keep throwing good money after bad and halt the operation.. and I would say they would move up the well and abandon the primary and quickly move to all the other zones of interest..

so perhaps early news is bad news, and no news is good news...

again all IMHO and dyor..

 

[bazollie]

G'day AgentM , I like your HO & look forward to the coming weeks! It is shaping up to be a very interesting period going forward.

 

[tarzanhey]

very interesting... commercial flow??

i understand the news we have is limited. There was a lot of leaked wirelines that have been passed around the globe, I have seen plenty of opinion on them.. My impression is that the well was always to be a closed well, no news until after the wirelines and possible fracing and flow testing. That policy remains on the secondaries, where no information has been passed onto the market at all, we are told that none will be released until after the fracing of the primary.

So with little data the average investor already in the share cannot guage the actual value of the share currently due to the closed well policy. its very possible people selling today are not aware of the successes in the secondaries, and the information being held back still today is potentially keeping the sp at a very low value.

only the bearest minimum of news that just passes the ASX reporting requirements has been released. For the JVP's its a constant battle of pleasing the operator, and not impeaching the ASX rules and regulations.

so back to commercial flow..

for all we know the chalks had commercial flow, even without fracing, couchy reported the mud was flowing back up the well,, that is really crazy pressure.. they had a very powerful rig and very powerful pumps, so they handled it easy.. perhaps other rigs may have had a blowout?? but clever reporting has limited the ability to determin anything.. i consider the chalks to have had commercial flow without fracing on the basis of couchys remarks..

for the lower hosston, they have declared in the last weeks they didnt see flow that warranted immediate fracing..

they have perforated the upper. and yesterday announced the fracing was to commence. the question of whether the upper had commercial flow or not is not technically important. 90% of wells are fraced in texas.. the geology is such that you dont just drill and plug into a pipeline. the gas is trapped in geology that usually doesnt give immediate commercial flow. but many many wells flow commercially after fracing.

I doubt they had commercial flow at the incredible depth they are at. the pressures and temperatures are extreme. I have seen on other forums that some JVP's have declared to some people that the geology they were after, what they modelled their well to be, came up exactly as expected. Sl isnt a guess, its not your usual well, its a world class well with 15 years of planning before it commenced. so the TCO operator is obviously pleased with all the progress, the seamless drilling, and the reports i see that the drilling models are exactly as expected means we have every right to be very confident in viewing the primary as a legitimate candidate for being commercially successful.

when the wirelined, they took samples, so they can lab test and analyse the soil and its structure porosity and permaibility. They can model this too,, when a frac team arrives at a well your at the serious end of business, they are expensive, and an operator is not blowing millions on a useless exercise. My view is that the primary is not at all capable of producing commercial flow as is and that goes for 90% of wells in texas... my view is that the flow they had, the geology and the characteristics of the soil is such that fracing is very probably going to produce exactly the commercial flow they were after.

if they didnt get the exact conditions they wanted, and for the massive size and expense of the drilling 50 wells deep into a play like thgis, you dont frac unless the conditions for total success of the entire field is potentially the outcome..

so the answer to million dollar question, imho is that they will not have commercial flow in the upper hosston until after fracing.. and as they frac each zone, they will know immediately after doing the first zone whether they will move onto the second or third or forth zones etc etc... each zone will be tested and i think operation and continuation may be assessed day by day....

IMHO i think each day the fracing continues indicates a stronger and stronger case for commercial success on the primary.. any failure on fracing early in the program would in my view create grounds for reassessing and cost cutting. they wouldnt keep throwing good money after bad and halt the operation.. and I would say they would move up the well and abandon the primary and quickly move to all the other zones of interest..

so perhaps early news is bad news, and no news is good news...

again all IMHO and dyor..

Just read this - Good post Agent M

I hope you dont mind but I copied it onto ADVFN.

Cheers Tarzan

 

[Agentm]

one thing is certain, the wait is over. the race is about to start..

we are in the phase where the horses are in the starting barrier and the red light is flashing..

i find little downside for the sp.. for the sellers it must be a tough decision to jump this close to the well being fraced and production tested..

good luck to all holders.. but somehow i feel luck isnt a factor here, its more a case of their being good conditions to suit the condtions for commercial flow..

bear in mind commercial flow means continious flow.. you always have background gas,, but fracing creates massive fissures and cracks into the surrounding geology stretching out from the hole,, that increases the volume dramatically, and using specialised equipment the fracing operation on any well will improve the flow, its just a case of the flow being sufficient to warrant it being commercial.. you dont abandon a well because of not having continious flow, you frac the well if the geology and the conditions suit the possibilty of getting commercial or continious flow from the fracing..

 

[surfingman]

one thing is certain, the wait is over. the race is about to start..

we are in the phase where the horses are in the starting barrier and the red light is flashing..

i find little downside for the sp.. for the sellers it must be a tough decision to jump this close to the well being fraced and production tested..

good luck to all holders.. but somehow i feel luck isnt a factor here, its more a case of their being good conditions to suit the condtions for commercial flow..

bear in mind commercial flow means continious flow.. you always have background gas,, but fracing creates massive fissures and cracks into the surrounding geology stretching out from the hole,, that increases the volume dramatically, and using specialised equipment the fracing operation on any well will improve the flow, its just a case of the flow being sufficient to warrant it being commercial.. you dont abandon a well because of not having continuous flow, you frac the well if the geology and the conditions suit the possibility of getting commercial or continuous flow from the fracing..

Agentm have you ever thought about sales and marketing? Just joking seriously, I enjoy reading your posts and they help to me stay positive on ADI we all know there's going to be a substantial move in SP in coming weeks.

 

[sam76]

bear in mind commercial flow means continious flow.. you always have background gas,, but fracing creates massive fissures and cracks into the surrounding geology stretching out from the hole,, that increases the volume dramatically, and using specialised equipment the fracing operation on any well will improve the flow, its just a case of the flow being sufficient to warrant it being commercial.. you dont abandon a well because of not having continious flow, you frac the well if the geology and the conditions suit the possibilty of getting commercial or continious flow from the fracing..

So that's what fraccing means.

I've been trying for ages to find a definition that's written for the layman.

Cheers!

 

[Broadside]

I assume "fraccing" is derived from fracturing, that is fracturing the rock so that gas can migrate through it.

Great post again AgentM.

 

[nioka]

Agentm have you ever thought about sales and marketing?

Good idea and ADI could do with a PR man. If anyone deserves to profit from this one it is Agentm.

 

[Agentm]

sorry for the long posts,, but importantly the nature of the business in texas is greatly prohibiting the information flow.

I dont have the a crystal ball on this share, but i feel the reasons for fracing are being done with sound reasoning.. the overall picture is to successfully extract gas commercially. you dont guess as much as you assess then try..

there is deafening silence on this well, absolutely nothing is being passed on as the truth is no one can give you the answer on commercial success.

my frustration is seing a successful secondary be kept in the dark, after the length of time i have sat and accumulated, i would have been happier if they went full steam after the secondary. but thats investing!!

the primary is certainly exciting, and each day they continue on the program gives me more confidence of their reasoning for possible commercial flow to become a reality.

to leave the share is not an option for large holders, so my belief is that the seriousness of the possibility of success is there to see the share very very tightly held..

 

[INORE]

Agent M, just out of curiousity, is there any chance of you divulging how many shares in ADI you hold and what your average price is?

 

[nioka]

Agent M, just out of curiousity, is there any chance of you divulging how many shares in ADI you hold and what your average price is?

Can I suggest the question is out of order. Does it matter? If he holds only one share it doesn't change the value of his input.