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CaptainSwag,
Someone on my wavelength.
"if i have my rose tinted glasses on i have always assumed/hoped the water cut will get worse as it starts emptying out and will eventually run dry(ish). but i am no oilie."
My understanding is:
Scenario 1: For conventional wells (e.g. oil reservoir with an aquifer):-
Yes, water cut will increase very slowly overtime as oil reserves are removed. The current productivity indexes are 205 stb/d/psi and 190 stb/d/psi for well 6 and 7z respectively. Overtime, as oil (and water) is removed from the well, the pressure decreases in the well (to the point where Hurricane may have to inject water into the well, to increase the pressure). As more and more water is injected, the water cut will increase.
Scenario 2: For Hurricane's case, assuming perched water:
As oil is extracted, water (from the perched water reserve) fills the "space" created by the extraction of oil due to the pressure difference between oil reserve and the perched water reserve. Therefore, water cut increases much quicker. At some point, the pressure between oil reserve and perched water reserve is likely to reach equilibrium (stopping water moving into the oil reserve). Following this, as production continues, more and more water is removed from the oil reserve --> therefore reducing the water cut quickly to "normal levels"
"normal levels" being scenario 1 above.
Slift.
slift - i estimated that you had used 6400 for well 7 which i agree was a reasonable assumption. though of course we dont know what proportions they used in reality. they may have tried increasing well 7 and reducing well 6 to try and balance etc etc . as i said i also wonder if the interference didnt end up producing a shed load more water than would have been found otherwise
if i have my rose tinted glasses on i have always assumed/hoped the water cut will get worse as it starts emptying out and will eventually run dry(ish). but i am no oilie.
i agree with your 15k and 57% water cut but I would be more kean on 20k with a max average of 42% water cut limit.
CaptainSwag,
Yes, the 60-65% is assuming that well 7z was producing 6400 bopd at the time.
Going forwards, at 15k production and 3k bopd, it's likely that water cut drops back down a little (due to less pressure drawing from water source), to maybe 45-50% (as you have calculated) or below.
I think the next RNS will provide us with the info, whether 7z is likely to be a write off or not. I'd be concerned if 7z water cut was above 60-70% with 7z production being less than 5k.
The reason for the increase in water production is still unknown. With multiple theories about:
- Coning
- Water trapped in nearby fractured pocket
- Aquifer
- Well 6 interfering with water near 7z
- etc.
For now, it's good that production is still managable until 57% watercut overall (at 15k bopd).
Slift.
slift ... the average water cut i agree with now you counted days right..lol
however the 60-65% figure is still up for doubt as we know there was interference which could have well increased water cut for that period. once the interference has been dealt with the water cut might go back down to 46% on well 7 where it was before.
Hi Mrprt/Paul,
Same planet as you buddy.
All the information for my calculations are from RNS' dated 2nd September --> 8th July.
Read my posts from initial post. I've shown how the figures come about, including the equation and calculation.
Total water cut was 29.3%, and well 7z had a water cut of 60-65% before they shut the well down in May.
Slift.
eddyates,
Agree, but my gamble is based on assessed risks.
- Water cut estimates
- Manageable production
- Background behind HUR
- Financial risks
- etc.
I know the risks to this investment (as I've pointed out in the past few days) to which Ammu believes that it's "deramps".
As always, you should only invest with money you're willing to lose.
ALL IMO. Slift.
slift,if your invested YOU are also gambling,just saying,no investment is a safe investment.GLA for the weeks ahead.
When is the next RNS?
Exactly so wait for the next RNS.....caio
Ammu,
I'm also invested here. It's not subtle deramps.
I just like to weigh the risks to my investments, rather than take a gamble (which you're probably doing).
For the time being, as watercut is manageable, more positives than negatives. I'll be looking forward to the next RNS with the "stabilised water cut" following ESP, and I know what figure I (and you) need to look out for.
You're welcome.
Slift that what the next RNS will tell you.
Stop with the subtle deramps....
CaptainSwag,
Thanks for checking! Clearly can't count up the days :')
Yes, 29.3% for period April 22nd --> May 17th
Which would make water cut from well 7 still at 63.6%.
Going forwards, 15k oil production (using above cut and your predicted figures of 12k oil from 6 and 3k oil from 7z):
well 6 at 13484 (12000 oil and water at 1484)
well 7 at 8219 (3000 oil and water at 5219)
Average water cut would be circa. 31%.
As i've said before, at 15k production, watercut is manageable until 57%.
But the questions at this point is:
- What is the watercut after ESP installation?
Slift.
slift - ok i see where you are coming from now for the average of 31% . i looked at your maths but as i dont work out water cut from oil produced but total fluids and your days didnt add up to 91 i didnt bother trying to pfaff around on phone.
i make it 29% average on 89 days
which would make water cut from well 7 as 50%
so back to my original
lets say well 6 produces 13484 b of liquid (12000 oil + 11% water 1484 )
then if well 6 produces 6000 b of liquid (3000 oil and 50% water 3000)
that would give an average water cut of 23% - which is a bit more than their previous 21% and still manageable.
Any serious investor knows this DC...it’s what’s gonna happen not what has happened that is the issue....
The OGA figures for production to 15.04 indicate a 26% average water cut.
CaptainSwag,
The first bracket is for April 1st --> April 22nd.
In the RNS, company has clearly stated that during this period, the water cut was 26%.
RNS: https://ir.q4europe.com/Solutions/Hurricane2018tf/3942/newsArticle.aspx?storyid=14677347
Refer to my initial post, where i've used company data for each period.
Slift.
your equation
(April 1st - April 22nd) + (April 22nd - May 17th) + (May 17th - June 5th) + (June 5th-June 30th) = (Q2)
(18500*0.26*20) + (16700*x*25) + (10300*0.08*19) + (12,000*0.11*25) = (14300*0.21*91)
Solve for x.
showed only a max watercut of 26%...in first bracket
last rns of 8.7.20 shows an average water cut of 21% - i see nothing about mass balance
Wrong.
I get 30.8% when solved for x.
And as you say, yes it's mostly from 7z. 7z produced 60-65% water cut.
30.8% is the combined.
"can you point out where in any company stuff released it has shown a water cut of 60%??
your maths does not show me that"
It's a mass balance CaptainSwag. Mass balance done against Q2 figures in latest RNS.
All maths is based around company data (from production each period).
The 60% watercut comes from assuming that well 6 produced 10.3k bopd for April 22nd --> May 17th.
10.3k bopd is what well 6 was producing following shut in of well 7z (Assuming that the company didn't immediately ramp up well 6 as soon as well 7z was shut in, so assumed 10.3k bopd from well 6 there).
Slift.
can you point out where in any company stuff released it has shown a water cut of 60%??
your maths does not show me that
slift - apologies - you are right the 11% was pre rns....shouldnt rush and do on my phone! in that case there is an argument that the esp might not being increasing the percentage of water cut only the increase in oil which therefore increases the volume of water produced.
your calculation shows a max water cut of percentage of 26% and that is only presumably mostly from well 7 - it is impossible for the average to be higher than the max of one well
"if you can show me how combining well 7 that has had a max of 30% and well 6 that has a max of 11% can mathematically be averaged at 31% - I would love to know"
As i stated before, well 7z had a water cut of 60-65% (not 30%) when it was shut in by management on May 17th.
The combined watercut on may 17th (6 and 7z) was 30.8%.
Slift.
CaptainSwag,
"slift - your assumption is based on a false figure though"
False? Here's my calculations for mass balance around Q2 results.
barrels/day * watercut * number of days.
The equation below is for watercut:
(April 1st - April 22nd) + (April 22nd - May 17th) + (May 17th - June 5th) + (June 5th-June 30th) = (Q2)
(18500*0.26*20) + (16700*x*25) + (10300*0.08*19) + (12,000*0.11*25) = (14300*0.21*91)
Solve for x.
"i always use company information for my calculations. the increase from 8% to 11% after ESP introduction was in rns."
RNS states:
"Since the Company's last update on 8 June 2020, the 205/21a-6 well on the Lancaster field has produced at an average rate of c. 12,000 bopd. The increase in oil production from the 205/21a-6 well implemented on 5 June 2020 has, as expected, been accompanied by an increase in produced water. Prior to commissioning of the Electric Submersible Pumps ("ESPs"), the volume of water production from the 205/21a-6 well represented a water cut of c.11% compared to 8% immediately prior to 5 June."
Note: "prior to ESPs --> water cut of 11% and prior to 5th June --> water cut of 8%"
ESPs were commissioned 3rd July.
Slift.
slift - i always use company information for my calculations. the increase from 8% to 11% after ESP introduction was in rns.
the previous figure for q2 average is for when the wells were flowing at a higher rate and thee was a higher proportion coming from well 7.....
if you can show me how combining well 7 that has had a max of 30% and well 6 that has a max of 11% can mathematically be averaged at 31% - I would love to know
apologies i calculated the water cut of well 6 at 11% but said 8%..
slift - your assumption is based on a false figure though
"how did you get 31% water cut?"
Mass balance around Q1 results. The 31% watercut was what 6 and 7z (combined) was operating at before 7z was forced to be shut-in by management.
"well 6 was at 8% for natural flow of 12000. then went to 11% after ESP enabled more oil to be flowed"
11% at flow of 12000 bopd.
We don't know water cut after ESP enabled.
"lets say well 6 produces 13484 b of liquid (12000 oil + 8% water 1484 )
then if well 6 produces 4286 b of liquid (3000 oil and 30% water 1286)
gives 2770 b of water out of 17770 liquid eg just under 16%
There is no way it is anywhere near 31%"
Are you saying that the water cut is below Q2 average now at 16%? Q2 average water production was 21% (as per latest RNS).
Slift.