Member Info for HeidHoncho

Oooooppppssss, in Part One, that should have read “the wells are crestal”, not “the wells are crystal”

Bloody autocorrect.

Part Two. (the potential experiment)

I have made certain assumptions for the moment with regards to the anticipated results, which I will only be able to confirm/deny to myself if/when the experiment is conducted.

Imagine if you will, a glass jar (reservoir), half filled with olive oil (oil) and half filled with vinegar (aquifer), and a straw.

Logic dictates that the olive oil will float atop the vinegar, in the same manner that the hydrocarbons float above the aquifer in the reservoir offshore.

My first assumption is, were I to insert the straw into the top of the olive oil and steadily apply a slight vacuum (no reservoir pressure in my jar, so vacuum rather than pressure is required to replicate production), that given the vacuum is merely slight I would anticipate being able to drawdown (suck) all/most of the olive oil out of the jar before there be any vinegar produced (sucked out).

However, were I to suck on the straw like a Dyson from the get go, in effect placing a demand on the olive oil that it did not have the propensity to produce/move at without having a causal (imbalance) effect on the rest of the contents of the jar (excessive drawdown), then I would anticipate receiving a gob full (influx) of vinegar at an early stage of the proceedings.

I also would not anticipate receiving pure vinegar in this instance, as I do not anticipate that the drawdown effect on the vinegar being linear as it moves through the oil, I would expect a “French dressing” effect, whereby there is a mixture of vinegar/oil as the vinegar vortexes (coning) through the oil.

And in answer to the original question as to how cloning can be resolved, my expectation is that were I to stop producing (sucking), or to at least reduce the demand (production) to a level that the olive oil had a propensity to travel/produce at without having a causal effect on the rest of the contents of the jar (I.e. to bring the drawdown back to the natural balance), then the vortexing (coning) would cease, and natural law would come back into effect where oil floats on top of water (or in this case, olive oil on vinegar).
Bringing the drawdown back to that which the reservoir can accommodate without there being causal effect on other parts of the reservoir would make the coning of the aquifer cease, and would remain abated for as long as the balance (drawdown) was not exceeded.

All of the above/below IMHO, as a means to better attempt to understand drawdown/coning, but perhaps I should stop eating cheese prior to going to bed at night as it appears to be affecting my lucid thought processes ..... lmao

Part One. (I have a habit of being excessively verbose when emptying my mind, so please bear with me, this is likely to exceed the parameters of a singular post).

For starters, let me begin by saying that although I have a knowledge of the O&G industry through previously having worked in it I am not educated in the world of reservoir/production technology, so any comments that I make are me questioning things from a lack of in depth knowledge on that particular subject matter rather than me making statements of fact.

Sometimes in trying to understand events I have a habit of over simplifying matters, and trying to understand the crux of the issue by attempting to imagine what may be happening in simplistic layman terms so as to grasp a better understanding of the topic at heart.

So, I am throwing out a postulation, which I hope can be better shaped/corrected by those truly knowledgable on the subject matter, so that I, and other less knowledgable people, might get a layman’s insight into the issue.

There are two key points as I understand it, the first being excessive drawdown being the instigator of potential coning, and the second being the reactive event, the potential coning caused by the excessive drawdown event.

My currently simplistic view on excessive drawdown is to question if this is a cause of demand outstripping current supply without there being a causative event.
i.e. If the reservoir is currently capable of producing for example 9000 barrels per day with no causative event, yet demand (i.e. production) is greater than that, or permitted to be greater than that, then the causative event would mean that the excess demand would require to come from elsewhere (i.e. a part of the reservoir currently not having demand applied on it, and given that the wells are crystal that would mean from deeper.

Coning I currently envisage as the passage of two fluids through each other.
In this instance the excess demand on the current balance in the reservoir (where logically oil floats on water) where the deeper fluids (aquifer) are being brought into play to replenish the higher fluids (oil) when the demand (and by “demand” that also means allowing an imbalance to go on unchecked or choked back) on the production of the upper fluid exceeds the propensity of the higher fluids to be produced at a rate greater than can be achieved without incurring an imbalance (i.e. excessive drawdown).
I furthermore do not anticipate such a fluid path would occur in a linear manner (especially so given two different fluid viscosities), and that the passage would induce a turbulence likely to cause a vortex effect, hence the utilisation of the term “coning”.

I have an inkling of an idea to conduct an experiment tomorrow in the kitchen to attempt to replicate the effect, but I will sleep on it tonight, as failure, or even success, is likely to be distasteful.

Surprised to see little comment about the utilisation of a phrase in the RNS.

“Production has been estimated to have steadily increased to the rate of some 1,500 bopd using a 12 mm choke, with further increases expected.”

An “estimated” flow rate ?

Flow rates are metered, not estimated, so how can they say that flow rates are “estimated” to have steadily increased.

They either have recorded data to substantiate that, or they haven’t, you don’t just “estimate” it.

Hopefully it is just a Cliveism, as he has previous of using incorrect terminology, but if not, and they truly meant that it is an “estimate”, then that is concerning.

IMHO

It is a seller based in Australia, has more than 10 for sale, has not sold any to date, and is knocking them out at around 105 quid each.

But what can be deduced from that is beyond me.

zoom, if as you suggest that they identified the water producing zone in the final 20 metres of the well whilst drilling it, why then didn’t they vet a cement plug to isolate that zone prior to running the liner (less the 20 metres that would now no longer be required), as that would have prevented the issues now being encountered.

And if it were only 20 metres right at the toe that was producing water, is it credible to assume that only such a relatively insignificant (20 metres out of the entire horizontal footage) footage would produce such a significant (40%) water cut ?

Can you explain how it will be a “relatively quick and easy fix” ?

I may be wrong, but if my memory of previous conversations on this board are correct then I seem to recall that there was mention of the liner system that was run being either a slotted, or pre-perforated, liner.

That being the case, then I am at a loss why some believe running a packer to isolate the water production from the toe is the way to resolve the issue.
A packer is an internal (to the liner) device, which would prevent ingress to the liner from below the packer, but what it wouldn’t do is prevent the water entering the annulus (the area between the OD of the liner and the formation).
In a normal, non pre-perforated/slotted liner, the annulus has cement in it, thereby preventing the annulus being a conduit for the water from the toe travelling back up the wellbore.
Surely then, in an uncemented liner this would allow the water from the toe toe enter the liner through the Peres/slots further up the wellbore north of the packer.

I cannot think that it would be possible to squeeze cement into the annulus below the packer, so as to isolate the annulus from the water producing zone, as there are no guarantees where the squeezed cement would go, and in a horizontal well there is every likelihood that it could travel up the wellbore and block off the perfs/slots in the liner over the oil producing zones.

So, having said the above, can anyone explain what the likely “quick and easy fix” that will be utilised to isolate the water producing zones.

I doubt that the move of the Aberdeen office from the West End out to Kingswells has anything to do with any recent advances in Sea Lion planning.

Office moves such as this are many months, or years, between conception and the move completing (planning time, time to source a suitable property, office design time, etc.).
And the plans for this move would have commenced well prior to any investment decision on Sea Lion having gained traction, let alone passed through some of the latter investment decision gates prior to internal approval.

And in any case, the Sea Lion project is currently being planned out of their London (not Aberdeen) office ..... Falkland Islands Business Unit, Office 23, Lower Belgrave Street London SW1W 0NR.

As far as I was last aware.

Surely, if the cost of production is low, then that can only be a positive.

Just because your production cost is low does not mean that your profitability will be.

Simple case of supply and demand.

If the product works as good as anything else on the market, or better still if it is superior to anything on the market, then your profit margin can be as high as you like.

If VAL’s product is as good as anything else on the market, and the production cost is significantly lower than any of their competitors, then all VAL need to do to capture the entire market is to price their product below that of their lowest priced competitors break even cost.

Why anyone can portray a low production cost as a negative is beyond me, unless they are being disingenuous, or just plain don’t understand business profitability 101.

IMHO

Stahel bangs on about “water flood” on the Hurricane horizontal wells, and then promotes why this should not be seen as an issue on the Petrofac wells that he is trying to ramp.

https://mobile.twitter.com/BurggrabenH/status/1206988887417147396/photo/1

Looking at his slide pack on Petrotal he spins every negative as being a positive, and he does the opposite of what RT does, where RT has to date under promised and either met the promise or overdelivered, whereas Stahel promotes that the existing Petrotal CPR is woefully underestimated and Stahel promotes that the figures should be significantly greater (this from a man not even qualified to generate a CPR, yet he believes he knows better than those qualified to do so).

I certainly smell something, and it is not Chanel No.5

They told you in the last ops RNS “The Company is confident that the water cut observed is related to perched/stranded water, based on temperature data, lack of rate-dependency, and water production behaviour after shut-in periods.”.

What more do you expect them to tell you.

I am not a believer that everything the BoD have done to date has been faultless, but on this occasion I am on the BoD’s side on this aspect we’re they not to respond to e-mails on subjects from individuals that they have previously responded to.

Do you seriously anticipate that they should respond to every e-mail sent from a myriad of individuals, be they investors or not, especially so to questions which they have already released a concise response to.

You may be right, if you are concerned that the BoD are being disingenuous about the currently witnessed water production not being reflective of their previously announced expectations, I cannot understand why you would wish to remain invested in a company that you clearly feel are being deceptive.

IMHO

Given that the AM and the Bleo are Bluewater vessels, and Hurricane surely have some stroke with Bluewater, if EV were to receive a NRB letter just leading up to Xmas for libelling one of Bluewater’s top clients it would be terrible, wouldn’t it ?

stumbler, the BoD have no requirement to put any offer to us shareholders, mores the pity.

Yes, if the offer was to buy out the company as a whole they would, but if it was just an offer for one of our compounds (VAL201 for example) then they would not require to put it to the shareholders, they could just sell without the need for further approval.

Would they accept a low offer if that were to keep them in coffee and biscuits for another couple of years, well I think I would let there previous disregard for their shareholders interests bare testament to what I feel.

IMHO

bluenotred, that would only be the case were the actual company be bought over, and not merely an asset being purchased.

I don’t think we shareholders get any say in whether an asset gets sold.

I am however open to corroborated correction if my assumption is incorrect.

“BROKERS targets ARE 100 TO 140” ?

Strange, I looked at the two most recent broker ratings on here, and it shows Berenberg at circa 80, and Cannacord at circa 60.

Why is there a belief that there will now be a requirement for “extra” “expensive” wells prior to adding any future producing horizontal wells.

You can likely achieve the OGA’s data acquisition requirements by first drilling a near vertical pilot hole leg, then plugging back and side tracking a horizontal leg from the same well bore.

They have done it before, and the OGA were call with that, so no credible reason for them not to be happy were the same to be done again.

And yes, there would be additional cost to do this, but it would not be significantly “expensive”, as it would be done in continuation, using the same mother bore, and not require the rig to be moved, so the incremental cost to achieve the OGA’s required data would be peanuts in relation to the well costs, and I would anticipate sub 20%, perhaps nearer 10-15%.

It is not likely that these will be wells that require drilled just to obtain data for the OGA, it is likely the mother bores would be utilised to become future horizontal producers.

IMHO

That news was released back at the end of October, and since then the SP has dropped over 60%.

Even allowing for the SP taking a hit due to the Liberator results surely the scale of the drop, and the failure of the SP to increase since that news release was made by the BoD at the end of October, would give concern that the industry/market is not convinced that there is a proven/definitive case that the OGA will impose unification sanctions.

And even if they did, then there are no guarantees that an agreement would be reached, or any significant traction be made in agreeing what any revised field development would take, anytime soon and likely not within 2020.

That being the case, and given that currently the company do not have sufficient funds through to that point (especially so given the requirement to renegotiate the junior debt in the first half of 2020, if memory serves me correctly, though I cannot remember the full details of that), would it not be more prudent to wait for additional funds to be sought through a placing in 2020 prior to investing/investing further in the company ?

IMHO

tilburn, problem with your cunning fallback plan is that there is no completion or production tubing ran in the well, and you cannot run a completion and production tubing on wireline, so you would still require to get a rig back on site.
You may get away with it being a work over rig rather than a drilling rig, but never the less, as a minimum, it will require a rig getting mobilised on to the site.

It is not the simple plug and play, non major equipment necessary, option that you are attempting to portray.

IMHO

“The cut in (6) is yet to be revealed, I see no mention of this” ?

From the RNS “The 6 Well is currently flowing individually at approximately 14,700 barrels of oil per day with minimal water cut.”

I take it then that utilisation of the word “minimal” must have either been insufficiently accurate for you, or that you believe they are covering up for a non existent double digit water cut that you are attempting to promote.

I meant to also add, I disagree with the point made that “Nexus have just been given the boot”, as the agreement was terminated by Nexus, not the other way around.