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Much stock has been put on the graph that suggests the WC has increased and the argument seems to suggest that it's coming as an aggregate of production from both wells rather than in September 17k and 8% WOC coming from just one well being on production only. It was pretty much dismissed as being unlikely.
The OGA data is 3 months in arrears.
The RNS on Monday....3 days ago directly from the CEO reads:-
"Average production for the remainder of the year is expected to continue to be in-line with guidance for Q4 2019 of approximately 11,000 bopd, constrained by system availability and data gathering requirements.
As part of the data gathering exercise for the Lancaster EPS, the Company has been carrying out periods of production from the 205/21a-6 and 205/21a-7Z wells separately, to assess fluid dynamics and measure reservoir performance without the impact of interference from the other well. An interim update will be made when these flow periods have been completed, which is expected to be later in December 2019"
I'll repeat the important part ***"carrying out periods of production from the 205/21a-6 and 205/21a-7Z wells separately, to assess fluid dynamics and measure reservoir performance without the impact of interference from the other well"***
Make of that what you will.
Also interested in the phrase "constrained by system availability" - could there be another flowline issue?
wellwell,
The simple answer is I don't know, and there is insufficient data in the public domain to be sure. The data that there is suggests three hypotheses, only the first two of which are plausible:
1. A rate-dependent watercut, which would be a bad thing as it would mean at least one well accessing water that is not perched/stranded.
2. Water breakthrough from perched/stranded water into the hitherto dry well, which would not be alarming if the total watercut were to then be stable at 8% (or so) irrespective of flow rate.
3. A fiendishly cunning management of the respective flow ratios, and total flows, from both wells, by calendar month, so as to needlessly scare the pants off any investor analysing OGA in-arrears data. I find this implausible.
4. Can you think of any others ?
It seems to me that there is a reason why HUR will be giving an EPS update in December, which is prior to their previously advertised Q1 2020 update. I have no insight into what they will say. I would very much like them to be firmly questioned in public by a competent questioner, however I suspect they will not subject themselves to that.
regards, dspp
WellWell : I'm making what the Dr Trice expressions are saying.........
Appears all good in the Hood. Lol Spirit paying for all GWA appraisal wells next year.
So what's the fuss
Yes indeed, but will the drill plan/location be? Possibly centred around Lincoln area inorder to develop a hub for a future Fpso OR will they continue to explore the far reaches of the Field?
An 8% water cut was listed in Septembers RNS.
This isn't exactly something new. 7.5% seems to be within expected range ? (5-10%).
However an non-geologist I appreciate the comments above...
https://www.investegate.co.uk/hurricane-energy-plc/rns/operational-update/201909020700068019K/
Sonofthebull: Spirit paying for all GWA appraisal wells next year.
Unless I've misunderstood, I thought Spirit paid for these last three wells and now we're both into 50:50 from here on in?
SotB I’m not entirely sure (and not for the first time either) what you’re saying but I’m guessing that in your opinion the water cut discussion is a red herring like me and there’s nothing to be concerned about in that regard?
Cat5: Hurricane paying for appraisel wells off of production out if Lincoln Crestal. Thanks to Spirit Energy
Best deal on Aim !
WellWell: The Doctor is not concerned on the water cut
Neither am I .
dspp/ww re Q4.
If I may repeat this from my post of 24th Nov, (pre latest RNS) as my 'starting position' and then develop it further, you and others may be able to build on it or trash it. Either way I'd be interested.
"As for GLA, whilst the EPS is ahead of guidance, there has been no word on whether the AM is fully functional yet, and whether all planned field evaluations have been able to be completed.
The rapid pressure recognition in the other well has been attributed to the large fault near the heel of both wells. It may also explain the high PI if this fault has good connectivity with the driving aquifer.
The longer term ability to produce from the whole of the horizontal remains to be proven. The steady production of c8% perched water from 7z needs further explanation, as it is a significant volume and must have a driver which the oil filling sequence could neither access nor displace and yet is able to flow preferentially to oil in other faults and fractures."
There is obviously a very good fracture network in the vicinity of these 2 wells, better at 6 than 7z.
They talk to each other and share the same fault at the heel of the wells.
When tested individually, they can both draw primarily from this shared fault and give dry and c8% water resp..
When both are open, the fault cannot supply the same volume to each and more is drawn from further along the bores where it is still dry in 6 and more of the water in 7z is delivered (x2 as the av is c8%). HUR will clearly have the pressures for each well and with two active flowlines will know if the watercut from 7z increases but are unlikely to share.
It is unclear to me how the full length of the horizontal will ever deliver given the flow characteristics of this fault which is and needs to be continuously recharged by the surrounding matrix. [Someone on ADVN worked out the volume of oil to date and if this was then expressed in lxwxd the values were imo not credible for just that fault].
I am happy to believe that it is perched water, but a significant volume has been produced and if it continues it must be from a very large volume which is isolated from the original oil-fill, pierced by the drill and yet is connected to a driver.
The question of when coned water may appear in this primary delivery fault was discussed by WWN who identified that in the CPR low case is given as 3 years.
Fluid mechanics...Over to you.
joe
JoeSoap - I don't know as sufficient information to form a view has not been given. There is clearly something going on. It is indeed possible that as you suggest in the near-well-bore(s) area there is limited fracture connectivity that chokes production, in such a way that opening one or the other well can influence where the fluids are preferentially drawn from, and hence the oil/water %. What quite a lot of people are misunderstanding is that the 'new' information in this respect is not the RNS information, it is instead the OGA production data. The OGA data quantifies exactly how much water and how much oil were produced in each month, which is information that HUR have not released directly to the public (it would be nice if they did). Also they are misunderstanding the reasons for discussing it. We are discussing it because it is vital to understand it, and because there are questions that it raises, not because I (at least) wish to influence share price. regards, dspp
So you don’t know but there’s clearly something going on? Or they flowed 7 on its own for the month of September at 17k and got 8% WC?
You may not be wishing to influence the SP DSPP but I fear you’ve done exactly that.
We're having a BB discussion on a very relevant tech matter: a discussion that should not be necessary.
Gla
SG2
"A discussion that should not be necessary."
Completely agree, have email Hurricane Comms for an update. Will post or perhaps we'll get a clarifying RNS at some point before the December 'Update'.
So you don’t know but there’s clearly something going on? Or they flowed 7 on its own for the month of September at 17k and got 8% WC? You may not be wishing to influence the SP DSPP but I fear you’ve done exactly that.
---
If the % watercuts are unchanged, they would have had to have flowed the 7z well on its own for pretty much all of Aug+Sep; and the 6 well on its own for pretty much all of May; and roughly 50/50 splits for all June+July. On the public data given, that is about the only way to achieve the outcome shown by the OGA numbers. As I have pointed out this is entirely possible, but is it plausible ? Is it more plausible than either of the other two hypotheses ? Is there a fourth (+) hypotheses and if so what ?
- dspp
DSPP I can only point to the comments in the RNS a few days ago when exactly what is being discussed was postulated ie one well shut in and the other flowing exclusively. Such testing was potentially not possible before due to the flowline availability issue although I can’t recall when that was rectified and may blow my defence out of the water.
Wellwell
"I can't recall when that was rectified"
See operational update 2nd September:
"Operations have now recommenced with two flowlines. As operations move into the next phase of commissioning over the coming months, production and availability are likely to be constrained as certain planned works and delayed data gathering activities will require periods of production shut-in."
Wellwell
"I can't recall when that was rectified"
See operational update 2nd September:
"Operations have now recommenced with two flowlines. As operations move into the next phase of commissioning over the coming months, production and availability are likely to be constrained as certain planned works and delayed data gathering activities will require periods of production shut-in."
=======
That dual flowline resumption date falls slap into the middle of the required Aug+Sep single well flow period, therefore it makes hypothesis #3 less likely. regards, dspp
DSPP,
I can see where you are coming from with the evidence on OGA charts, but is it not possible that HUR's interpretation of the same data is different to yours.
In July presentation HUR mentioned that as there is very little draw down, it is not possible for the aquifer water to come up against gravity. There was also Bach Ho graph in the July presentation showing the water cut, which even though is not a high percentages but shows a rapid increase during 87-88 and then a linear increase against production from 88-89, but then suddenly drops down significantly in 89-90.
Also on slide 11 of Oct roadshow the EPS start up results show water cut for 6 well as nil and for 7z at 8%. Do we expect them to include Sept data there? I believe they should have!
I know the RNS was ambigous with little technical details and an unexpected Lancaster update on its way, but that may as well be to give something positive to hang onto until Q1 2020, as it is likely to be otherwise. I don't know where WW result and no further update on Lancaster till Q1 would have left us.
You are a very respected poster and your opinion (which most value and respect) matters and has consequences. Usually we find answers with you but seems this time you yourself are left with a lot of unknowns and fears.
We must be having around 7p+/share in cash by year end. I want to ask your worst case scenario but please don't tell me as it seems everyone will believe that to be the only scenario.
Dr.Trice argued and presented the water issue with a lot of certainty in each one of his presentations and roadshows from July till now. I believe he even said once that this issue has been put to rest with all the evidence thus far. Hope he was right all along and he does not have to eat his own words and a lot more.
Nerve wrecking time to say the least. Hope it works out well for holders!
DSPP I don’t follow. I thought the Sept 17k 8% WC was the contentious info and this comes after resumption of the two flowline capability as per RNS 2nd Sept (a Monday)? August was less than 8% and could be commingled. I fully appreciate the same could/might be the case for Septembers figures but they did state they would be flowing each well separately in the same RNS!
I’m not saying this is the case, but it remains a possibility unless I’m missing something. I’ll caveat all the above by stating I’m typing this whilst babysitting.....my own kids....anted they’re quite distracting!
wellwell, you are indeed misunderstanding. May I suggest you look at the watercut vs monthly flow rate SCATTER plot I posted on TLF along with the accompanying notes in various posts. Not the month-to-month calendar trend, but the x-y scatter plot. Then you will probably understand the concern, and the (so far) three hypotheses that I have been able to propose.
yasirasmi, thank you. HUR will have far more data than we do, so I hope they are seeing things very differently. HUR have been very straight with the data that they have shared, but have not shared all the data. That is their prerogative but it does create issues at times like these. They are also somewhat casual at seeing things from the other side of the fence. We live in hope.
regards, dspp
dspp
if you look at the prrsentation 7/10/19 it says eps results at or above expectations.
best case water saturation 5-10% from CPR
well 6 = nil
well 7z = 8%
there is a big tick at the side
All your data is just repeating what they have already released and have said is better than expected.
I'm not arguing against your 3 hypotheses for clarity. I'm just pushing the fourth possibility that only 7z was flowing for the whole of September which you think is unlikely. So let's hope whomever is correct that the outcome is yet positive.
WW.
RNS 2nd Sept "Operations have now recommenced with two flowlines. As operations move into the next phase of commissioning over the coming months, production and availability are likely to be constrained as certain planned works and delayed data gathering activities will require periods of production shut-in."
RNS 2nd Dec "carrying out periods of production from the 205/21a-6 and 205/21a-7Z wells separately, to assess fluid dynamics and measure reservoir performance without the impact of interference from the other well"