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So remember the frak fluid has to be trucked off site. The days of dumping it in the burn are long gone. Having said that am excited as everyone else.
Ask yourself this, why is the sand coming back, because it’s flowing like a train. The well needs some work, it might even need fracking again, I am confident we have a secure borehole into the reservoir and those good old boys (and not so old) are on top of it.
I think if it is a flare then highly likely to be gas, thats what the permit specified. Everything else will have to be trucked off site. Back in the day we would fill the hole up with diesel and it would get burned off as the well flowed. I think that in an environmentally sensitive area such as here, this would probably not be allowed, and if it was it would be covered in the permit. I think the permit only allows for gas flare off? I suspect that the completion fluid and fracking fluid are presently going through the separator, hopefully followed by oil, if not already doing so. If they are flaring it has to be news soon!
First off I never did anything like this when I was in the business. I think they will drill out all the way and flow test the lot. For two reasons, they can measure the returns against what they pumped in and two they can check the flow at various points in the well bore when the well is flowing. At least you could in a vertical or near vertical well.
Normally you would have a well(s) that is used to inject gas /water into the formation not possible at the moment. Gas lift is something different
I suspect what has happened is that they think they are near the end game. They probably been thinking we need some financial advice. If they employed an FA that person will have looked at their position as a simple risk reward scenario and said so how rich do you want/need to be. Maybe spread the risk a little, I mean that is what we should all be doing, not having all your eggs in one basket. If I was in their shoes I would not want to be in the position where it's all on black, if it's red I'm broke if it's black I got more money than I can spend. Maybe in my 20's or 30's not when you are 70. I think they have probably just done something eminently sensible, nervous private investors see 2+2 = 5.
Chiksan to spell right, industry standard, two men and a sledge hammer to rig up and rig down, though a tugger is useful. Able to take high pressures.
The big take away for me was the trouble free lateral drill and completion. You got a sense of the relief in the RNS, plus their stated plan of not pushing their luck with length pre-drill.
Assuming all is good with the long term flow, then this lateral completion really de-risks all the future laterals. Some might remember the attempt to kick off in Texas, the rock was so abrasive it wore out the diamond bit in a matter of feet. There are other potential issues such as keyholes and bore collapse. I guess Alkaid is lateral friendly rock.
I would just add to Scott's quote from Telemachus, think Deepwater Horizon on the Artic Tundra, our shares would be worthless. I for one am quite happy they stopped drilling when they did.
Initial flow rates are important but the key will be flow 6 month later. So all being well it will be next year that we really understand what we have and confirmation of commerciality.
Example initial flow rate 1000 bpd, one week later 50 bpd versus initial 1000 bpd 6 months later 800 bpd, figures used are just random.
It has been explained well previously, if I remember correctly by cbaron and Scot. In fact look at the post preceding yours, one word Farallon debt for equity, ok 4 words.
I think the well flowing is a nailed on certainty. Rate is the key question. The big risk is the mechanics of the directional drill.
It absolutely has to be, compare that video with the one from the winter drill and that was on a nice day! I worked in the North Sea in the 70's and 80's, I have stories that people just don't believe, in fact I look back and wonder, I was young, fit, going to live forever and the only things I thought about was girls, beer and motorbikes, I survived more or less intact, a few crushed digits. Different game these days, to be fair that is a good thing.
To be clear they did the flow test later when the well was revisited.
I don't don't think it will be much deeper compared to Alkaid 1. They stopped at around 8500 feet with 400 feet gross pay, they had not drilled out of the bottom due to having to up sticks. They thought (from the seismic) that there was another several hundred feet to go, so TD will probably be about 8700 - 8800. Due to wx they did a quick flow test just under the topseal about 8200 with 6 foot perf, no water contact which is a good thing. Just my understanding of course.
1st of Aug on reaching TD. Should take 4 weeks thereabouts to drill. RNS's will be generated by TD, logging whilst drilling, side core samples, plug and abandon to casing shoe, kick off for lateral drill informations. That will all happen over a couple of days. Of course there is always plan B, don't ask but I guess it depends on what they find at the bottom of the vertical hole.
So just for clarity testing has not started, they are drilling ahead. Assuming you mean when testing is started the simple answer is 1-3 weeks. The full answer is probably 6 months to “prove up fully”.
Personal view is that the markets generally are risk off for a whole host of reasons. Therefore I think, while there is a hard core of PI's who think this is the best thing since sliced bread, rest of the market is happy to wait until derisked further with (positive) results from this drill. Plus of course Farallon is probably continuing to sell so supply continues to outstrip demand I guess.
Management we know is conservative, so not much in the way of titbits (oil over shakers etc) to try and froth things up can be expected. Drilling should proceed quickly, then slow up for the horizontal, I am glad that they are doing a reduced lateral section as we do not want any FU's.
Markets have stopped defying gravity it would appear. I sold everything except PANR last November, mostly Tech stocks, the cash is either under the bed or in money market funds. If there is any sector in the markets that you would want to be in at the moment, this is it and PANR is in it.
If time they can run a wire line logging tool and check flow from each interval.