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Shedfull/Slift
If 7k is the minimum this could be achieved with maximum water cut of 80% .
rainbowchaser - funny enough i was commenting on this the night before the rns bomb dropped. Trice has stated that now due to data collected they can identify water zones as they drill through a combination of techniques - which should bode well for future drills as these can now be isolated before the well is completed. They can also isolate any poorer zones.
mcb55 - agreed on stability and "greener". i am not sure the press matters - one thing about covid is that you no longer hear about "climate" - i think people may have realised how much they took for granted. when actually faced with things being taken away there is more of a sobering up.
the first objective of eps was to prove concept and acquire data for ffd. the income generated was the icing. the concept has been proved with production so far. the longetivity was the next question - which is going to be determined by water cut and now potentially on the downgrade on reserves. if a ffd was viable there was always a way that HUR might progress whether through income/farm out / sell etc . unfortunately there would seem to be a bigger question mark on ffd from the last RNS. continuous problems are one thing - they have been overcoming them - but if the volumes dont add up then it is dead in the water.
if lancaster is dubious - i dont think it bodes well for lincoln which has always seemed to be a poorer prospect. halifax has always been the big one in my book - but will they still get the chance?
Slift
Thanks for the answer, as I think if the water keeps increasing then the BoD will have ti keep drilling wells to compensate therefore the cost of drilling more wells depending on oil recovery over time and oil price is the question and why there might not be a T/O by another company.
As its possibly back to a wait and see game by oil companies etc and the market.
JIMO
"What is the maximum oil / water percentage for the BOD to state the well is no longer financially viable."
This is more limited by number of barrels produced and brent price. Obviously there are limitations to oil/water percentage too, but bottom line is production of oil.
At $45/barrel oil price, approx. min of c.7000 barrels of oil from the wells need to be produced to still be economically viable.
Slift.
Geo wiz
The CPR models the exact case we are discussing. It recognised the risk that OWC could be at structural closure even though HUR felt that ‘extremely unlikely’. I’ve quoted the reference pages here numerous times.
I personally don’t think the 2017 CPR is an issue. I think the issue has been HUR management.
What is the maximum oil / water percentage for the BOD to state the well is no longer financially viable.
"Seems to me that even with a shallow owc, LanFax sill has potentially quite a lot of oil - but, in the greening environment, is it viable or will it become stranded (BP)? That's the investment question now, imho. "
Oil will be required for another 50 years. WoS is a politically safe and relatively "green" as not far to transport the oil (vs Middle East oil for instance), so on rational grounds Hur should expect to be developed and be a success. However the big issue is who is going to touch it and spend billions to develop it!? Anybody announcing a new Field Development will not get great press!
Clearly they (cpr provider) weren’t worth paying attention too in this case.
How many of this aged BODs actually understand the complexities and risks of modelling fractures and OWCs on modern 3D data? The key uncertainty was never really challenged in house or by the CPR provider who frequently parrot the view of management. It’s clear that the new technical CEO has come in and put some reality and governance into the company. Governance that the old boys couldn’t provide.
Nic, Slift: acknowledging fully that yourselves may be entirely correct about the owc (i.e. that it is likely iro the structural closure), and the resource implications of that, I disagree with a couple of points from this recent thread:
(i) Nic; 'perches are unlikely": looking at the seismically-derived model, one would expect the probability to be for a significant number of perches (with a normal distribution of sizes) across the field. One might expect fissure low-end closure/sealing ('tight formation' i.e. fissures filled with crap in lay terms) in the deeper reservoir to exacerbate this frequency of occurrance.
(ii) In fluid-flow terms, i'd expect a pen through a water-filled bottom (or top) -closed fissure (amongst other 'open' oil-filled fissures) to preferentially flow water to oil - at any given local hydrostatic pressure - simply due to viscosity effects, with a turbulent o-w interface in the flowpath, become slugged in pipework at all angles, inc horizontal. (While the driving pressure may accelerate the lower-density to a greater velicity, the viscous drag through smaller fissures would somewhat negate that effect.) Am i wrong here?
(iii) Hur's drills found odt's frequently towards iro 1700 m tvdss, but only 21a-4z showing water @ ~1340 m (interpreted as perched in Hur CMD/RPS); is the indication being discussed ('shallow', 1340m owc, a la dspp) a refution (is that a word?) of the 21a-4 & 21a-7 results? If not, what is the inference here?
(iv) the tlf dspp-nimrod thread offered some insight into why nimrod wasn't buying-into hur, but nimrod doesn't actually state anywhere publicly, as far as I recall seeing, why he didn't like Hur's 'bullheading' explanation of Hal's results. A few lse bb posters considered the bullheading to be an adequate explanation, if i recall correctly. Any other thoughts on this?
Seems to me that even with a shallow owc, LanFax sill has potentially quite a lot of oil - but, in the greening environment, is it viable or will it become stranded (BP)? That's the investment question now, imho.
from a noily,
gla
Geowiz - 'Shows CPRs are not often not worth the paper.'
Suggest an alternative then.
CPRs cannot be perfect, as they are based on the available information at the time (which the likes of PIs will mostly not be privy to), hence why subsequent analysis may vary as datasets/interpretations are enlarged/improved.
The 'who' that conducts them is always worth paying attention to imo
Rainbow I bought in here just after the announcement thinking it’s now good value but after research I’m not confident. Your question is good one as the seismic is all they have to go on and it’s almost certain that they can’t see the water in fractures on the 3D. The water should show on the well logs where there’s porosity but with these reservoirs there is precious little of that. The update of the reserves will be key. If the oil water contact has moved up too much it will wipe out most of the reserves and render the project sub economic . So fingers crossed. Basically they were way too optimistic in the CPR. Shows CPRs are not often not worth the paper.
The coning is likely through the major fracture zones which dominate flow. Lancaster is not a simple inverted sandstone bath tub with a clearly delineated flat OWC. The fracture network will cause anomalies across the field.
The geology is all very interesting but the key question remains the so what. If correct, then the current wells will continue to water out. Replacing them is urgent and the company probably need to drill 2 new producers in the next 2 years to replace them (whether new wells or side-tracks). I don't think they can afford this from within current cashflow due to pressure from the convertible bond date, which means further debt/equity/farm-out is required.
If the new board articulate a strong case for OWC and reservoir reliability higher on the structure, and find the cash for further drilling then there is light at the end of the tunnel. If only RT hadn't shot for the moon and designed the wells around the best possible case.......
Nic7760,
I'm not contesting here but just thought I'd provide my opinions.
I disagree that perched water would be uncommon. But I don't believe that perched water in a FB can produce such a high watercut, due to the way/formation that perched water would be trapped.
As Pecten11 said, I don't believe coning can occur here. It's more that the draw of water from aquifer would fill the entire "tight formation/matrix" due to cohesive and adhesive forces exerted by the fluids.
There was a comment in on of the Q&A's where RT was asked if they could see the fractures that contain "perched water" with seismic, to which he replied NO, I seem to remember it was followed up by "what about during drilling ??" to which the reply was along the lines of we couldn't before but we are working on that now. Has anyone gave this any thought ?
@Pecten11 Good question. I don’t really know tbh. But water is coming, that’s a fact. And it can only come from the aquifer.
The field is still charging. I guess that’s why we have encountered hydrocarbons below closure. But it just sits in tight pockets and can’t flow commercially. Just my guess.
Nic, earlier you were suggesting that the reason why the actual OWC was higher than suggested by the drill logs etc, was because the matrix/formation was 'tight' - how does an aquifer 'cone' through a tight formation?
@Pecten11 Yes, fractured basements are not that common, although as pointed out by HUR many such fields have been produced in the world. Now, 7z has produced so much water to date, with a water cut that keeps increasing that it’s just very likely to aquifer coning.
Nic, thanks for the replies -'Perched water does exist but is very uncommon in the oilfield' - fractured basement is very uncommon type of oilfield
@Pecten11 on perched water, it’s specific to HUR and Lancaster. Perched water does exist but is very uncommon in the oilfield. It was a made up theory put forward because it did not contradict the deep OWC long advocated by prior management. To me, it was cognitive dissonance more than anything else. As soon as the 7Z started to cut water in early June 19, the shallow OWC contact should have become the base case.
@Pecten11 it’s my opinion
Nic, 'put that perched water lunacy to bed.'
Is the lunacy you refer to, the idea of perched water in fractured basement generally, or just Hurricane's interpretation WoS?
Nic7760, from your original post -'
I've been following you guys for a very long time and let's just say I'm intimately familiar with the HUR story (although not an insider, only working from public info).'
How does that reconcile with -
'But here, since there is no matrix and big mud losses, it was difficult to tell. '
What bit of public info says 'it was difficult to tell '?
If its your opinion fine, the bb should welcome a new interpretation, if you have another source, please share it
@rainbowchaser if water cut starts to decrease in the 7z, then maybe it’s not aquifer coning. But for now, it has continuously increased. It’s been 16 months... Maybe time to put that perched water lunacy to bed.
Dr Kaboom. You mean that you are happy to denigrate HUR to the detriment of shareholders and its staff, but object to new analysis from sbdy analytical with knowledge of the industry, as it may impact your short if the penny sinks in. True scummmmm.