The larger the fractures, and the more interconnected they are, the better.
This is because in a very thin fracture, the oil can be considered as two thin films, each one clinging to the surface of the rock. There's no "free" oil in the middle. But as the fractures widen, more and more oil is away from the surface of the rock. So that oil in the middle will flow easily. The wider they get, the more the fractures will flow like a tap.
The permeability of the Shaikan reservoir was reportedly given by John Stafford at the PESGB presentation (Gulf refuse to release the slides) as 12 Darcy. A Darcy is the measure of how easily a fluid (e.g. oil) will move through a reservoir. Sand is about 1 Darcy. Most reservoirs internationally are fractions of a Darcy. This shows that the Shaikan reservoir is of exceptionally high quality. What is causing that? There is only one possible explanation: the fractures must be exceptional.
John Gerstenlauer basically said that the ERC Equipoise assumption of 0.4% fracture porosity, which they used in the CPR, is wrong. He said on 28 May 2012 (the Investor Presentation) that Gulf had quantified it. Nearly three years later, for reasons unexplained, it has still not been released to the Private Investors. But it certainly does exist.
Just catching up on day's events. Bloody hell there ain't arf a lot of crap posted on here. One day get a 55% rise, then next day falls back 10% or so probably with a lot of profit taking from non long termers making a quick few quid. So what's the big panic? The RNS on the cash received seems to have been completely ignored. Good news by anyone's slant. Long may that continue. Some are sweating that there are no bids in yet. All in good time my friends, patience and that patience will be rewarded.
My buy order got filled at 47p so i am happy and glad to be rebuilding my GKP collection.
So how does a reservoir engineer estimate the volume of oil in a reservoir? It's very simple actually! She need two key measurements:
(a) the volume of rock which holds oil, in cubic metres
(b) the percentage of that rock volume which is "pores, fractures and vugs". This is the overall porosity.
Combine those two figures via a simple formula (with a couple of constants and a couple of second-order variable thrown in) and you get the Oil In Place in billions of barrels. There's no mystery to it!
So what does this mean for Shaikan? The volume of rock is measured via the drilling (the "logs") and the seismic. And the porosity? That is not difficulty to do.
The ONLY way to assess the volume of oil in Shaikan is to assess the porosity, and that means assessing the Matrix Porosity and the Fracture (+ any vugular) Porosity. Gulf have spent millions of dollars on studies to assess these numbers. Or hundreds of millions of dollars, if you also include well costs!
The importance of the fracture porosity is that oil in the fractures has a very much higher Recoverability than oil in the matrix. So not only does the fracture porosity drive the Oil In Pace, it also drives the Recoverability. That's why it is so important.
It appears to be the case that Gulf assumed the fracture porosity, pre-drill, to be 0.8%. A reasonable, conservative assumption in fact. But it is believed that they had established by 2012 that it is something like 3%. If this is the case, there is a huge volume of liquid oil in the fractures and what's more, it can be produced quickly. So a great deal of oil could be extracted early in the 80 to 100 year production life of Shaikan.
Any purchaser of the assets, or a farm-in partner, would have the fracture porosity at the top of their list of required parameters. Because it determines how much oil is recoverable, and how quickly.
And therefore the shareholders must be told what it is, because otherwise it is impossible for them to make investment decisions on an informed basis, or to vote at an EGM or AGM on the basis of facts.
Yesterday, as a direct result of a Sky News article, a hasty RNS was released. Without this article nothing would have been said to keep the thousands of PI's informed as to the state of play. I think the major shareholders probably knew exactly was going on but I can only guess at that. A further RNS has informed us of a payment, made by a "third party" for future oil supply. What on earth is that all about? My point here is that, now the cat is out of the bag, so to speak, these two gentlemen, one the CEO and the other the non-executive Chairman have not even had the good grace to at least speak to their shareholders. This is just plain rude. They both need removing from office IMHO.
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