Member Info for Exploration

SundaySun

I understand your comments. All the major companies now review all their exploration portfolios every 2 or 3 months in a ruthless, Mueller-style enquiry with Judge and Jury. The Jury includes ‘peer group’ managers and the Judge is the ‘chief geologist’. Now and again the Black Cap is donned by the Judge and projects are thrown out. But mostly, local managers are scolded and told to return next time with a more convincing case, or go ahead and drill. This is how capital is allocated but Sound cannot do this without more diversity.

The red flag for me about Sound's plan was at the Deep Dive where they announced CPRs were 'too expensive' and 'just told them what they knew'. So there is no second opinion to challenge management assertions.

Over and above that, Rothschilds - I hope - will not create a Confidential Information Memorandum for an LE sale without a complete CPR for Tendrara.

12 months ago this BB was all about ‘a good CPR’ whereas today our money is going into TE-10, with no updated risk estimate following TE-9.

FYI, I'm staying invested - there is a lot of latent value in Tendrara beyond what I paid to play the game, but not in TE-10 in my (geological) opinion.

Partridge - Today’s RNS, taken together with previous drilling and TE-8, has wide consequenses for the Tagi play in High Plateau. The silty sandstone in the TE-9 Tagi with dolomite is consistent with TE-8 (where pore spaces are occluded with halite). Dolomite is a mineral which is a mixture of calcium and magnesium carbonate. It’s a ‘diagenetic’ mineral which forms in restricted coastal saline lagoons with a local supply of sea-water to provide the Mg content. In simple terms, vast volumes of Tagi sandstone or siltstone may be non-reservoir due to diagenesis as mentioned at the Deep Dive. This is similar to the Meskala Gas Field, next to Sidi Moktar, where halite occludes the pore spaces.

In all of the Tagi wells in Tendrara there is a trend from coarse grained deposits at the bottom to fine-grained silts or shales at the top. This reflects an early phase of basin formation, which gradually declined until only the background sedimentation or ‘playa lake’ sediments remained. The Triassic basin floor in Tendrara is characterised by shallow, ephemeral saline ponds and associated mud flats. Deposition occurs mainly as a result of occasional sheet floods originating from the margins of the basin. Thin sheets of silty or sandy mud are deposited either in the shallow lake, on the surrounding mudflats, or on the exposed basin floor, in times when the lake is dry. Groundwater plays an important role in the system. ‘Deflation’ (erosion by wind) tends to erode the surface down to the capillary zone, where groundwater keeps the sediment in place. This creates a very smooth, flat surface. Since hydrologic conditions can vary throughout a basin and through time, the resulting sediments can be very inhomogeneous and unpredicatable.

Along active faults, the background sedimentation is replaced by alluvial fan systems as we saw in the Deep Dive. The fans found so far in the Tendrara Basin are dominated by debris-flow deposits near active faults such as TE5 Horst or the SBK discovery, where 300bcf is estimated + oil shows in volcanics.

The sediments in the area of the TE-10 stratigraphic trap created by the onlap of the Tagi deposits on the Hercynian unconformity have probably been deposited along the low relief edges of the Triassic basin. Therefore, they presumably do not belong to a more porous and permeable alluvial fan facies, but to the TE-9 style playa lake facies. This implies that thi TE-10 stratigraphic trap probably contains no significant amounts of primary reservoir rocks and are later diagenetically rendered impermeable.
Experience shows success in exploration depends on not drilling dry wells. Sound should reconsider the merits of drilling TE10 for the Tagi play andexamine the merits of Carboniferous objective.

Sometimes it takes more guts to stop a dry well being drilled than to drill it in the first place. Frankly, a sub horizontal well on the SBK Horst, with stimulation might just prove more gas and expose Tendrara's true val

All

While we are all waiting - - - something to keep us interested in TE-9 progress.

Below is a link to an 'old timer' explains how to interpret well logs. Not exactly rocket science.

Quite often it's shrouded in mysterious jargon, but its actually quite simple.

https://www.youtube.com/watch?v=ao50IfHqw1E

Riddlers - thanks - I had not realised what Reach is all about.

When is an RNS not an RNS?

WHAT IS RNS REACH?

No ordinary newswire, RNS Reach is a high-profile investor communication service aimed at assisting listed and unlisted companies to distribute non-regulatory news releases such as marketing messages, corporate and product information into the public domain. RNS Reach is based on the existing RNS UK-Regulatory service and has the same levels of efficiency, control and broad dissemination.

RNS Reach enables unlisted and foreign-listed companies to deliver their news to both a private and professional investor audience. Announcements are released automatically on the London Stock Exchange corporate website (“Market News” section) and are tagged as “RNS-R” in the “Source” column of the Market News service of the LSEG website, as well as on a variety of other information vendors including RNS – RCS on Thomson Reuters terminals and as RNSN on Bloomberg.

WHAT TYPE OF ANNOUNCEMENTS CAN APPEAR ON RNS REACH?

The type of announcements published by RNS here are:-

· Intention to Floats – on AIM (main market is Regulatory)

· Launch of new website/product/services

· New production/distribution/retail agreements

· New contracts/orders/ventures

· Financial results/accounts (for non-listed companies)

· Management appointments

· Financing/investment arrangements

· Company presentations/events

· Equity research reports

Gassy

Any gas in the drilling mud is actually dissolved in the water component of the mud. A sampling device at the surface called a ‘gas trap’ removes gas from drilling mud returns as pressure drops near the surface. That gas goes to a device in the mud logging unit called - unsurprisingly - a gas detector. This is usually a flame ionisation detector which can distinguish methane, butane, ethane, propane, pentane etc.

Calcium carbide pills are added to mud at specific intervals to calibrate the gas detector in the mud logging unit and check lag time. The carbide reacts reacts with water in the mud to produce acetylene gas, C2H2. The mud logger adds the carbide pill at the surface down-going mud and waits to see the result from returning mud.

BM explained how the forward programme includes ‘on balance’ drilling mud to minimise ‘formation damage’ where water filtrate invades the near wellbore reservoir. Once the water gets in the capilliary pressure cannot be overcome by gas trying to escape from the reservoir pores. If the invaded zone is deep, bigger peroration charges can reach the clean reservoir.

‘Underbalanced’ drilling involves allowing the reservoir to flow while drilling and diverting dissolved gas via a ‘gas buster’ to a flare. Not recommended for exploration wells, but good in well-known development geology.

Partridge

That could be the dilemma for the team now they have logs and indications of how the mud programme has protected any Tagi gas reservoir. A busy day for BM, JP et al!

Option 1. Run and cement 7" casing which we know is on site ready to go. Then drill ahead with 6" bit to explore Carboniferous. Drillers will want to set casing in a shale which survives a leak-off test.

Option 2. Drill ahead with 8.5" hole in Carboniferous. Log. Then run liner 'if required'

Both options need a seismic check shot survey to calibrate velocities and enable accurate depth conversion. From numbers quoted in rns it looks like depth prognosis was within 2 or 3 % of actual reported depths. Pretty good considering TE-9 is >20 km from nearest control point.

Exciting moment!

Primetime51

The RNS just says the well has reached a 'total depth' or 'TD'. It is slightly ambiguous and doesn't say this is end of drilling although TD is normally associated with the bottom of the well. It also refers to 'measured depth' which is usually deeper than logged depth because the drill pipes stretch relative to their length at the surface. Also, there is no datum mentioned; ground level, kelly bushing or seismic datum?

So maybe BM's team has elected to take stock, log and then decide what to do next in conjunction with the drillers.

After all, this is an exploration well and the discovery of gas in a good Carboniferous reservoir might even push the Tagi into 2nd place as an objective.

In the last decade there has been a multi-TCF boom in the North Sea Upper Carboniferous underlying the Triassic Leman Sandstone. This occurred after >100 wells had penetrated the Hercynian Unconformity and found Upper Carboniferous shales and sands while exploring shallower Leman Sandstone prospects. There is a nice cartoon in this link below which could equally be applied to the Tendrara area. The geological history is very similar, including thick Triassic salt, although the UKCS Carboniferous gas is sourced by intra-formational coals and over-mature, oil-prone Lower Carboniferous shales.

https://www.cgg.com/en/Media-and-Events/Media-Releases/2010/11/lodestone-leads-the-way-in-the-southern-north-sea

Rampus

Here is a link to the 'classic' paper on Frasnian (Devonian) source and petroleum systems in Algeria. For this petroleum system to work the Frasnian needs a plumbing system to connect to the Tagi. All wells in Tendrara so far have bottomed in Upper Carboniferous.

http://www.cspg.org/documents/Conventions/Archives/Annual/2001/053-U.pdf

The Deep Dive indicated that geochemistry of gases/liquids from Tendrara suggests a source which is a carbonate. That would fit in with a Devonian source.

I suspect the hydrocarbons in Tendrara may be a 'cocktail' from different source rocks including Silurian and Carboniferous. Many prolific petroleum provinces have multiple sources which generate hydrocarbons at different times.

Riddlers

Yes indeed, you are correct. Onhym got quite keen on Gaz de Schiste 10 years ago, and Fastnet added it to their Tendrara story at >60 tcf!

http://www.onhym.com/pdf/Publications/Shale%20Gas.pdf

Drilling in the Carboniferous can be calibrated from microfossils in the cuttings. The Upper Carboniferous is most likely to have marginal marine sandy reservoirs as shown in TE-8 in the early stages of rifting.

Onhym's thesis is that the shale gas is generated from interbedded coals in the Westphalian - similar to the Jerada Basin 50 km to north where there is a big coal mine + power plant.

Boderisimus

The RNS says;

"TE-9, has now been drilled to a total measured depth ("MD") of 2925 metres in Palaeozoic, Upper Carboniferous mudstones"

Are you suggesting mudstones is the reservoir objective? I think not.

If it had said Upper Carboniferous SANDSTONES, I'd have been encouraged. Hence they should drill deeper to find the sandstone. If not, it makes the whole Pz play and BM's 10 TCF claim a lot riskier.

Timster

Put yourself in BM’s shoes and imagine today’s morning meeting video conference between Sevenoaks and TE-9 wellsite. First – some facts.

Palaeozoic play

If you go back to TE-8 rns in March last year the Pz play came as a bit of a surprise. My guess is that the geologists ‘got lost’ and were not sure at the time that the well had penetrated the Hercynian unconformity.

Quote - “The Company had previously announced that it had completed the drilling of TE-8 by reaching Target Depth for the well at 3,120 metres, some 359 metres into the Palaeozoic (which was previously undrilled at Tendrara and Meridja). Â Sound Energy has now completed logging, including the use of the Saturn 3D Radial Probe MDT”.

This rns saying Pz was “previously undrilled” revealed Sound had not realised there were numerous Pz well penetrations in Tendrara. TE-1, TE-2, TE-3 and TE-4 all penetrated Pz. TE-3 drilled >1400m of Pz rock. Pennzoil’s JK-1 drilled about 2300m of Pz. All dry, with no sand.

Palaezoic age

Yesterday’s rns indicated Upper Carboniferous shales - probably Westphalian. Presumably this was based on micro-fossils which were ‘hot shotted’ to a nearby micro-palaeo lab. Onhym have excellent palaeontologists in Rabat. Or it could be guesswork. But we know there are intraformational seals within the Pz which may overlie reservoir sandstones. It follows that, IF there is a Pz play, in TE-9 it underlies the shale found at TD.

Depths

I would not rely too much on the depths noted in yesterday’s rns. Yes, it states a Measured Depth which is usually slightly deeper than the logged depth as ddboy will testify. Also there is no mention of datum – ground level, rotary table, seismic datum etc.

Next steps in' ideal world' – and hopefully with Onhym’s encouragement;

Log well
Set 7” liner to protect Tagi if gas charged
Drill ahead with 6” hole to explore Pz
Log Pz + velocity survey to calibrate seismic

If no reservoir or gas in Tagi, drill ahead in 8.5” hole to explore Pz
Log Pz + velocity survey

the technology has been around since early Landsat satellites

There is a lot of 'hocus pocus' in combining the various spectral bands - Scotforth is marketing an informed, scientific approach, but nowadays you can buy the imagery yourself and use a proprietary package to geo-locate and analyse it on a laptop.

Check out this 30-year old BP video.

https://www.bpvideolibrary.com/record/580

Jacklevi and ddboy

The 'view from the mud logging unit' is as follows;

The prognosed best reservoir will be found in the lower Tagi. It is same all over Tendrara.

The lower Tagi directly overlies the Hercynian unconformity which is a major erosional surface signifying the top of the Palaeozoic.

As we know the Palaeozoic will be either Upper Carboniferous, Westphalian age (sands and shales) or Lower Carboniferous,Visean age (grey shales with volcanic ash - as found in TE1,2,3,4 and 5)

So what?

If mud-loggers see grey shale returns with drop in ROP and elevated game ray from MWD tool that means the prospective Westphalian has been eroded away. The decision then is to drill another 30 feet (i.e. a single joint) to create a rathole for the logging tools. Then run logging tools and case hole with 7" liner.

On other hand, if mud-loggers see sand and shale with abundant micro-fossils that will indicate prospective Westphalian sequence. The decision then is to carry on drilling to explore the Upper Carboniferous 'treasure' in 8.5" hole. That runs the risk of mud-filtrate invasion into any Tagi reservoirs and formation damage, but this well is designed to explore rather than to produce.

As in all oil and gas operations, there has to be a compromise based on objectives, cost and so on.

Below is a link to a really old film from the North Sea in 1969.

At 3.50 mins there is an interview with the Marine Superintendent ('captain') and at 7.52 mins the rig geologist. Of course its all much more high tech, safer and expensive nowadays, but the principles have not changed.

Same approach applies to Seismic Vessels - one crew to sail the ship and another to operate the survey equipment.

https://www.youtube.com/watch?v=p76xLvJoNuM

Riddlers - it's a continuous process. This is good link to how it all works and how the data is presented in an integrated, user-friendly format. This will appear on the screens in Sevenoaks in pretty much real time to stimulate cork-popping and air-punching behaviour.

https://www.slb.com/-/media/Files/resources/oilfield_review/defining_series/Defining-Mud-Logging.pdf?la=en&hash=0C1557C871F39C7DF1010C56236794DAD74543C2

When, or if, the well penetrates a gas bearing sandstone in the Tagi the mud loggers will see increased gas and cuttings which reflect a sandier lithology.

As the well approaches the underlying Palaeozoic target the cuttings will provide an immediate clue that the well has penetrated the Hercynian Unconformity. In TE-1, 2, 3, 4 and 5 the Palaeozoic was non-reservoir, Visean (Lower Carboniferous) grey shale with no gas. As we know, TE-8 found Upper Carboniferous Westphalian sandstones with gas and shale.

If you look at the 'geo-phantasmorgrams in the Deep Dive, you can seen Sound is hoping for Westphalian sands below the Tagi in TE-9. I imagine that after penetrating the Hercynian Unconformity drilling will continue in 8.5" hole until TD and then another 2 or 3 singles to provide a 'rathole' - sometimes called a 'sump' - so that wireline tools can cover the whole zone of interest.

PNE79; The Petroleum Agreement Article 20 and Association Agreement cover Confidentiality in detail. Onhym will be keen to avoid another "Talsint" event and any risk of upsetting M6. In practice, casing points and small stuff can be processed by Onhym pretty quickly. Bigger things such as a new gas discovery require a cautious approach in Morocco.

Here is relevant paragraph from the Petroleum Agreement.

"20.3 PETCO shall inform ONHYM before sending any press release or answers to any information demanded or requested by any stock exchange regulation relating to this Agreement. ONHYM will respond not later than two (2) working days after the date of receipt by ONHYM from PETCO of such press release or answer."

The Lancashire lot are are led by the the so-called “trustafarians” – otherwise known as “the eco-toffs”.

See link.

https://www.theguardian.com/theobserver/2000/feb/27/featuresreview.review1

ddboy

There is between 200m and 300m of dolerite between Upper Salt and Lower Salt, so I guess that will require intervention by drillers and reduce ROP. Also, Upper Salt is more heterogeneous and more susceptible to creep whereas Lower Salt is more stratified with shale bands.

Dolerite sometimes has gas shows in basal rubbly section. So its not a 'walk in the park' - but there again, as you always remind us, it never is!

DDBoy

TE-9 is now drilling 12 ¼” hole including a long-ish salt sequence. How do you reckon drillers will formulate mud to cope with this section?

Then,what happens when the bit tags base of salt and after logging, 9 5/8” pipe is run and cemented.

We have been told formation damage of the over-pressured Tagi has been a problem using WBM but Sound has never fronted up with a drilling manager.

In the 8 1/2” hole, In your experienc,e would you expect a complete mud change-out using, say, calcium carbonate as drill-in fluid instead of barite? I’ve seen situations where calcium carbonate is used and weighting agent and later is dissolved from formation with hydrochloric acid to clean up production zones.

Correct choice of drilling fluid and mud engineer hocus locus would seem to be critical in the reservoir interval.

Ericnat17

Ozzie43 - there is another way to look at this.

10 exploration wells have been drilled in the Tendrara contract area in the last 50 years. 9 of the 10 wells have found gas in the TAGI reservoir. The only failure was JK-1 where the TAGI is absent. So 90% of wells have found gas. Or 100% where TAGI is present. TE-8 was ‘gas bearing’ – so not a dry hole, but rather a commercial failure (or “partial success” according to JP-speak.

Well Operator Year TVD Res
(m)

TE-1 AGIP 1966 3185 TAGI Gas bearing
TE-2 AGIP 1966 2688 TAGI Gas bearing
TE-3 ONAREP 1984 4363 TAGI Gas bearing
JK-1 Pennzoil 1987 2717 No TAGI Dry
SBK-1 Lone Star 2000 3536 TAGI Gas discovery
TE-4 MPE 2006 3119 TAGI Gas bearing
TE-5 MPE 2006 2682 TAGI Gas discovery
TE-6 Sound 2016 2665 TAGI Gas discovery
TE-7 Sound 2017 2611 TAGI Gas discovery
TE-8 Sound 2017 3066 TAGI Gas bearing

The 30% CoS for TE-9 refers only to volume. RPS’s CPR gross prospective resource volume of 335bcf but with no reference to previous drilling or reservoir effectiveness. Actually producing the gas is the challenge. But we now know - after the TE-6 and TE-7 successes - that poor TAGI reservoirs can be stimulated to achieve commercial rates.

Does the above mean TE-9 is a dead cert? Well, I don’t know, but the “bottom-up” risking approach yielding 30% looks pessimistic compared to the “top down” view yielding 90% using historic drilling results.