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Hope I'm right with my prediction of it only falling to 41.
7Z produces from the heel, the toe being deeper is of nil effect at present. You hit a big fracture at the heel and the rest of the well may as well not exist initially.
I'm not saying there are no risks in HUR but I'm not seeing this as being as you lay it out.
...and to add to Biffadog's post, also from the interims.
---
We have gone to great lengths to explain why we do not expect to see coned aquifer water during the lifetime of the EPS, under our base case. This is our continuing expectation. The perched, or stranded, water we have experienced is consistent with our reservoir model and since our capital markets day presentation this interpretation has been reinforced by the Company's technical work. Notwithstanding the increase in aggregate perched water production to a sustained rate of approximately 7.5%, water cut remains within expected ranges and is not impacting oil production levels or the cost of production.
Now that both flowlines are in operation again, we can see that production from the -6 well continues to be of dry oil. Given the proximity of the wells and strong interference between them, this is supportive of a stranded pocket of water being intersected by the -7Z well. Hurricane's analysis suggests that current production is only coming from a relatively short section of the borehole in the vicinity of the heel in each well. Over time, fractures further along each well bore are expected to contribute to production, reducing the impact of any individual water-bearing fracture.
---
I hope nothings changed since last Friday. ;)
It seems the 'seeds of doubt' have had their expected effect. SP well down.
MMs are cunning, and are experts at mind games.
This is MANIPULATION, AND SHOULD BE REPORTED AND LOOKED INTO.
i don't mind a drift.....but the last two days have been painful!
hurricane - always reminds me of that joke.
Whats the similarity between a hurricane and a woman. Wet and wild when they come. take your house when they go!
That's interesting Biffadog. The "heel" and not the "tail".
Business as usual and the SP drifting with no news expected for some considerable time, as expected. Think I should go buy myself a nice freezer...
Here is HUR's explanation of 7Z water cut taken from the recent trading update.
"Now that both flowlines are in operation again, we can see that production from the -6 well continues to be of dry oil. Given the proximity of the wells and strong interference between them, this is supportive of a stranded pocket of water being intersected by the -7Z well. Hurricane's analysis suggests that current production is only coming froma relatively short section of the borehole in the vicinity of the heel in each well. Over time, fractures further along each well bore are expected to contribute to production, reducing the impact of any individual water-bearing fracture."
So water pockets as predicted by HUR before the EPS and nothing to do with coning.
GLA.
SIPP, you misunderstand me. The new information to which I refer is the 7Z water news, combined with the recent Warwick Deep well result.
Ex trader- you’re right of course. I suppose part of me was hoping someone who does follow this more closely could conclusively address my specific points and dispel my worries. Perhaps I should see if I can get there in January - I’ve met RT before and you can’t help but agree with him once he’s spent some time with you. My current plan is to await news from the next well (which I’m fairly confident will be good news) then cut my holding in half until there’s more clarity about this ‘perched’ water.
"And while I want RT to be right, it’s only a fool who receives new information and doesn’t even question how this impacts their assumptions."
I don't see that any new information has been presented, just conjecture based on trying to scale from a diagram.
Everyone in engineering knows, when reading an engineering drawing, that they generally are not to scale and most state this on the drg.
So, no new information. That can ONLY come from the Company and so far, it hasn't. Indeed the opposite is true and so I would encourage you to read for the first time, if you haven't, or re-read the Half Year RNS. In particular:
"We have gone to great lengths to explain why we do not expect to see coned aquifer water during the lifetime of the EPS, under our base case. This is our continuing expectation. The perched, or stranded, water we have experienced is consistent with our reservoir model and since our capital markets day presentation this interpretation has been reinforced by the Company's technical work. Notwithstanding the increase in aggregate perched water production to a sustained rate of approximately 7.5%, water cut remains within expected ranges and is not impacting oil production levels or the cost of production."
Hi Geo101,
Perhaps your concerns are better directed to Dr T or other qualified geologists, rather than to a motley crew of PI's, with varying levels of expertise, from middling to - in my case - none.
If anyone you know is attending the CMD in January, perhaps you could have them ask for clarification of your concerns.
'Forum non conveniens'. …...….Well, it does seem to be the 'mot du jour' ;->
HTH and ATB
For someone who is supposed to be a holder then you have a very strange way of promoting this stock. Forgive me if,to say the least I am a little sceptical of your reasons.In other words...…...
Biffa,
It’s a shame you feel that way. Nothing in my posts is incorrect, by the way. I laid out the facts, then said a possible interpretation. You might not agree with it, but for now, it’s a possibility.
Don’t get me wrong, for someone whose been holding here since late 2016 I want RT to be right. The upside to the share price is monumental if he is, but quite clearly there’s considerable doubt among people in the know given this is still stuck in the mid 40s. And while I want RT to be right, it’s only a fool who receives new information and doesn’t even question how this impacts their assumptions.
p.s. I don’t think me posing these types of questions that go over the head of the average investor makes any difference to the share price of a £900m company. Yes, the PMO board is my usual haunt, but I do come over here from time to time as an interested holder when I hear something new. Last time I was here you may or may not recall I brought Spark Exploration and their blocks to everyone’s attention.
also like to add, if that was the case then both investment funds CA and Kerogen Capital would have sold out long ago and I don't think Spirit would have invested so much money. I am sure all those companies have top expert consultants to advise them.
Totally agreed Biffadog. Dr Trice stated, at the CMD, that, whilst the Company would not provide a running commentary on the EPS, it would inform the market immediately if there were any issues with the EPS. They haven't so there isn't.
Biffa - I agree with you. Sounds like 'fake information' to cast the seeds of doubt in people. The instigator of the tale is probably an MM.
RT has no reason or motive to lie in his reports. I think he is a straight arrow.
FB even...
Geo101,
HUR categorically state in their recent CMD that this water is perched water and not from the aquifer and go onto explain in detail why this is the case.
They also explain why they think only one of the wells is producing perched water at this stage.
Lastly the water cut is at the bottom end of the expected range.
Can I very politely suggest that Rob Trice and his team know a damm sign more about FN than you do.
Maybe you should watch the CMD again.
I'm not going to enter into further discussion with you as that's what you want to enable you to highlight your false and misleading reading of a successful EPS.
I note that you spent the majority of your time trading and posting on PMO and have done for years. Says a lot to me.
GLA.
JayKay
Hope won't end up badly as was considering to buy myself????
"Formation water = Bad, implies coning, SELL SELL SELL"
Scratch that part about the 4Z, I was looking at the wrong grey line! But my point about the depth the 7 intersects the basement on that diagram remains.
To summarise:
4Z: DST within structural closure produces oil and water.
6: Shallower horizontal, closer to the crest of the structure, oil only in DST
7: DST only oil, but from a very thin interval just below Top Basement
7Z: the deeper of the two horizontals, produces oil and water.
Seems a fair chance to me from the above that the OWC is shallower that structural closure at 1380m or so. To believe that you have to not believe things like the resistivity logs, NRM etc which I have no trouble doing, given how this reservoir behaves compared to traditional reservoirs.
adoubleuk,
Thanks for your response. A couple of follow up points.
The first thing I’ll bring your attention to is the diagram of from the capital markets day presentation that shows a cross section of Lancaster and the depths of various wells. You’ll notice the scale says TVDSS on the side. But you’ll also notice that, very naughtily, the depths of the various wells are actually projected in MD. For example, the 4Z, which we know is deviated (and from what I understand never went below the 1380m TVDSS local structural closure) appears to extend well below local structural closure on the diagram. The 7 well, which as you correctly pointed out produced oil from a small section of basement at approximately 1300m depth, doesn’t appear to penetrate the basement until almost at the structural closure on that dodgy diagram. The question that comes to my mind is - why are they misleading us all with that diagram?
My theory leads on to your one of your other points. I don’t believe it is axiomatic that the 7Z is producing from perched water. I think there’s a reasonable chance that the tail end of that well is below the OWC. Why else did the 4Z produce 20% water from a DST within structural closure?
AK,
Talking of the Lancaster Bomber, Get yourself a VPN, ie NordVPN, and watch
https://www.bbc.co.uk/iplayer/episode/b00trb2g/dam-busters-declassified
Martin Shaw takes a fresh look at one of the most famous war stories of them all. The actor, himself a pilot, takes to the skies to retrace the route of the 1943 raid by 617 Squadron which used bouncing bombs to destroy German dams. He sheds new light on the story as he separates the fact from the myth behind this tale of courage and ingenuity.
Well Worth watching.
WWN,
Earlier you wrote:
"I do recognise that articulating this ‘issue’ will not be welcomed by some. "
'This issue' being the WD result, and how it may possibly / eventually affect overall recoverable oil volumes.
Yup, it seems to be a 'touchy' subject.
I don't have answers, either; but I tend to agree with you that a more detailed explanation of WD's non-commercial result and possible implications will be welcome. But it's all very recent stuff, and there's no way the company's going to reveal their conclusions until they're fairly sure of things.
But until such explanations are forthcoming, WD remains a 'niggle' which can't be ignored. Irrespective of the result of the new Warwick West well. Because although not entirely a 'duster', given that an oil column was found, it can still be thought of as a 'dry hole', given that the results led to it being PA'd.
And there's an odd coincidence at work. Not that I'm superstitious, because I believe that being superstitious can bring one bad luck (!). But the company's most notable previous 'dry hole' was Wellington, which people don't like to mention these days. And the WWII Warwick bomber was something of a trouble-ridden failure, and an attempt to improve on the Wellington, which wasn't much better. Whereas the Lincoln was an updated development of the Lancaster, in the early days simply called the Lancaster Mk IV & V, and was a success...
Geo101,
"At what depth did well 7 produce it’s oil from?"
Quoting page 28 of the CPR: "The PLT runs demonstrated that 100% of the flow (under DST: my addition) came from a short 8m interval (1,368-1,376 m MD) near the top of the open hole section."
(Another addition of my own: 'well 7' was only marginally deviated, max 20°, so we might round the MD off to somewhere around 1300m TVD, or 1150m TVDSS.)
"At what depth is 7Z producing its water from?"
It's axiomatic that 7Z is producing its 'perched water' componant from the 'horizontal', and I haven't found an exact TVDSS for that. However it appears to be around 1250m.
"At what depth did 4Z produce it’s water from?"
The water content of 4Z which was only 'traces' (15 bbl/day) was 'considered to be likely drilling brine rather than formation water'. On DST1, conducted 4563 ft (nb FEET!) - 4950 ft MD. DST2 was 4563ft - 5180ft and flowed 2500 bbl/day oil + 500 bbl/day water.
(4563ft = 1390m, 5180ft = 1578m)
"What does the MDT data tell us about the OWC?"
Not very much, in my opinion! Obtaining valid MDT data in FB has proved equivocal and unreliable.
Biffa
I'm not sure I fully agree with you. I'll try and take each point in turn. Please take the points in good faith.
Read-over. The whole basis of the CPR is that the Rona Ridge fields are analogous. This is based on a common lithology and a common geological history that in theory should lead to an extensive fracture network. So there is undoubtedly read over,because to suggest otherwise undermines the resource estimates. Of course there are known differences and this lack of read over introduces uncertainty. The main difference between Warwick and Lancaster/Lincoln seems to have been lack of fluid loss when drilling across seismic scale faults. I'm sure we all agree this is linked to permeability and Production. So how will future wells be located and how much of the field volume resembles Warwick vs Lancaster? How do you value HUR with that Unknown?
6-12 months. Hur have said this, but Stobie also said in the CMD Q&A that others (ie majors) will take longer. So if we're talking takeovers we need to think about risk appetite of the bidder. I've never claimed 3 years, I've simply said HURs low case model shows water breakthrough in Y3 and asked if this is valid.
Poorly connected section. This is a description of what was observed. I'm asking what are the implications of this observation? An entirely different question. Listen to the CMD Q&A again. RT is pretty clear in saying he does not know why flow rates were not commercial. At around 1:54 he says he simply does not yet know whether reservoir depth is linked to producibility. He says more work and more data and wells are required.
Finally, I don't think I've jumped to a conclusion. Yes, I have doubts, but I am certainly not claiming to know the answers here. And my original point in raising this a couple of weeks ago was to suggest a reason why the HUR SP is relatively low. I still think uncertainty over WD implications is a factor and will remain so until HUR do the analysis to explain the implications better. Until HUR do that work I'm pretty certain IR will not be able to help.
WWN,
Having said this maybe the following would put your mind at rest.
HUR have categorically stated that there is no read over from WD to Lincoln or Lancaster.
HUR have categorically stated that 6-12 months is enough to prove the validity of the FB concept as far as the Lancaster EPS is concerned (not 3 years).
HUR have said "Init??al analysis suggests the well intersected a poorly connected section??on of the fracture network within the oil
column - further analysis to take place". So there's already a perfectly viable explanation as why the WD drill was unsuccessful.
You appear to be jumping to conclusions here against the flow of information from HUR.
If you contact to HUR perhaps you be good enough to share.
GLA.