Member Info for davwal

Must say, I'm surprised that it's so subdued. But it is Zephyr, I suppose.

Just catching up from Corfu. Well, I wouldn't have wanted to be out over the weekend...

I'm not sure one can draw anything too significant from the piddling amount of trades in this stock, let alone that investors think the BoD are weak.

We should rest easy, if there was badness about, we'd be seeing a 20-30% drop. All good.

All I believe is that at $7M involvement, the investor will know absolutely that assuming decent OIP levels production will follow at the earliest opportunity. That production and its associated income, coupled with a revised CPR, will determine immediate next steps and also the longer-term strategy. The questions about whether there is a farm from a third party (or parties) will hinge on market sentiments, OIP expectations and likely extraction rates. Not withstanding all that, there would remain the possibility of a take over. As I’ve said, it’s interesting times - putting it mildly!

Regarding the number of future wells, I asked AI if more were required in shale like Cane Creek…

Yes, drilling more wells in shale fields like Cane Creek is likely necessary to fully understand and extract the potential resources, especially in areas like the Paradox Basin in Utah. While initial discoveries and production have been promising, there's still significant potential for further exploration and development, requiring continued drilling efforts.

Here's why:

Incomplete Resource Characterization:

Estimates of shale gas potential are often based on data from a limited number of wells, leading to uncertainty in resource estimates. More wells are needed to map the regional thickness, organic content, and thermal maturity of the shale formations.

Optimizing Production:

Drilling more wells, especially horizontal wells, can help identify optimal well placement and refine stimulation techniques to improve production rates and efficiency.

Expanding to Unexplored Areas:

Continued drilling can help identify new exploration areas within the larger shale play and assess the potential of previously unaccessed zones.

Technological Advancements:

New drilling techniques and stimulation methods are constantly being developed, requiring more wells to test and implement these advancements in real-world conditions.

Economic and Energy Security:

Developing shale gas resources can contribute to economic growth, reduce reliance on foreign energy sources, and improve the energy security of a region or nation.

For example, the Cane Creek shale in Utah has seen a mix of successes and challenges, with some wells producing significant volumes and others encountering issues like wellbore instability or needing more sophisticated stimulation techniques. More wells are needed to address these challenges, refine production strategies, and fully realize the potential of the resource.

Obviously we are approaching an extremely significant period for the company, and if the well results come out as hoped it’s likely to be a real test of CH’s business nouse going forward. While the one-off investor has been crucial to getting the current well delivered, we have to remember we were supposed to be self sufficient cash-wise. We certainly don’t want Colin handing out great chunks of future interests and income for peanuts too readily. He’ll need real balls and skill to deliver a strategy for developing the Paradox as fast as possible, with the best returns possible for Zephyr and its investors. Alternatively, to strike a great deal for selling the lot. Interesting times…

Google AI said:

Oil reserve calculations involve estimating the amount of oil that can be economically and technically extracted from a specific area. This is done using various methods, including geological surveys, seismic data analysis, and reservoir modeling, to determine the volume of oil initially in place (OIIP) and the recovery factor (the percentage of OIIP that can be extracted).

Here's a more detailed breakdown:

1. Geological and Geophysical Analysis:

Seismic surveys:

Used to map subsurface structures, identify potential traps for oil accumulation, and determine the extent of formations.

Well data:

Logs from drilled wells provide information about the type and thickness of rock layers, porosity, permeability, and fluid content.

Geological models:

These models are developed to represent the subsurface structure, incorporating geological and geophysical data to understand the potential for oil accumulation.

2. Reservoir Modeling:

Volumetric calculations:

Estimate the volume of oil in place (OIIP) based on reservoir dimensions, porosity, and fluid saturation data.

Material balance:

Relates reservoir pressure changes to fluid production to estimate remaining reserves.

Decline curve analysis:

Examines the historical production rate of a well or field to project future production and estimate remaining reserves.

Simulation:

Sophisticated computer models simulate fluid flow within the reservoir to predict production performance and estimate reserves.

3. Recovery Factor:

This is the percentage of oil in place that is expected to be extracted, considering factors like reservoir characteristics, drive mechanisms, and recovery methods.

It's typically estimated to be in the range of 30-35% for conventional oil reservoirs.

4. Classification of Reserves:

Proved Reserves:

Those that can be extracted with a reasonable degree of certainty, based on existing data and geological understanding.

Probable Reserves:

Reserves with a higher chance of being extracted, but with some uncertainty due to factors like economic viability or technological challenges.

Possible Reserves:

Reserves with a lower chance of being extracted, based on less certainty and more potential risk.

3P Reserves:

The sum of proved, probable, and possible reserves, representing the upper limit of what might be extracted.

My (limited) understanding is that sandjet can penetrate further into the surrounding area with less potential damage and with a cleaner and improved flow resulting. Pretty good, in other words!

Pete, in this instance I was thinking of bigger fish US oil companies who would might be interested in acquiring Paradox/Zephyr if the drill data looks positive. A market competition to gain the assets would be nice.

I can’t believe there’s a dearth of interest from bigger fish in the outcome of this well and its implications for the wider field. Could get interesting pretty quickly.

Well, CH said this after 98 cuts over 16 sections of the lateral extension had been completed.

"We are highly encouraged by operations to date and are excited about the imminent commencement of the production testing.

Sounds promising and absolutely brilliant to me. In the circumstances what more needs to be said right now? I’m confident.

All sounds highly encouraging and like the work is being carried out to the highest standards. Should have a better day surely.

It did on Friday - until it didn’t!

The most recent post on X of 26/03 was much the same. Completion was getting underway with 16 perforations following - then commencement of testing. I’d guess testing is about due now if all has gone without a problem. An update was promised in the X post, so presumably must be imminent.

One benefit of having the financial partner with such a substantial interest is that the focus will very much be on achieving production asap. No messing. Still can't believe the current silly price, in the circumstances.

The fibre optic cable provides pressure and temperature data which enables a full understanding, and thereby maximisation, of the completed well’s performance capabilities - so that goes in last (and possibly stays depending on type).

From Utah Geological Survey just prior to 16-2 being drilled…

The Cane Creek play has experienced some success over the years, with production totaling over 10 million barrels of oil since the first wells were drilled. However, there is an estimated 1.2 billion barrels of potential oil (barrels of oil equivalent, which includes natural gas) in the Cane Creek, meaning that 99.2 percent of the oil in the Cane Creek remains in-place. These numbers do not include all the other overlying clastic zones that also have petroleum production potential. So far, the challenges of this play have overshadowed the significant successes. This DOE-funded project seeks to provide multiple paths forward for the development of a commercially successful tight oil play (Cane Creek and other clastic zones) by reducing drilling risks and uncertainty.

I suspect the investor sticking 7M plus into the well has rather more confidence in the outcome and that they are not on the garden path.

But what will the well produce.? Sounds to me like predominantly gas.