Member Info for SEA7

This is the advert that the state were using for Block xlf -west rustavi in 2017... page 49...

https://static1.squarespace.com/static/5548d1b5e4b0680763eeeb53/t/599328e36f4ca3787ea04136/1502816533827/GEORGIA+INVESTMENT+OPPORTUNITIES+2017.pdf

Industry: Energy (Oil and Gas)
LEPL State Agency of Oil and Gas
Ministry of Energy of Georgia
Description of the project:
Brief background, location:

The total area of the block equals to 37.63 km2. West Rustavi oil field is enclosed within the scopes of the block. Conducted
works include: seismic works that were carried out on 20 length km. Quantity of oil produced on the block –35 416 tons (1988 – present). Number of wells – 13.

Total investment cost in USD: for initial period (4-5 years) 8 mln
Products/services to be developed (with estimated production capacity):Resources - 2,221 million tons of oil
Project’s implementation period: 25 years may be extended for additional 5 years
Projected financial targets: IRR – 21%, NPV – 675 339 USD (in case of discovery of 1% of recourses)

the overall market drop was black and white in its application this morning.

market expected 700bopd - came in at 295bopd - 405bopd shy. 405bopd at $60 is about £7m in revenue in one year.
The reduction in the mcap today was £7m

pretty obvious how the market calculated that so as to know where to price it today. Doesn't mean the current price is accurate or not, it just had that much removed off the cap.

As production increases, then this amount will be added back on and we will be up around 10.5p again shortly.

initially it stabilised at 1100bopd and was choked back to 700bopd.

Now there is no constraints on production due to storage, they will steadily clean it up and decide whether or not 1100bopd, 700bopd or a different rate is optimal for the best overall recovery profile.

a lot of II's would rather all be wrong together, as it doesn't do your career any good to be wrong on your own - hence they have a habit of doing the same as each other.

A PI is on their own anyhow whether they are right or wrong.

the average pi is using his/her own money - an Institution is using other peoples money and taking fees up front, regardless of performance.

yes the rns said...average..

Production resumed on 11 July and since testing began the Well has produced at an average rate of approximately 360 boepd (295 bopd plus 390 Mcf/d) on varying choke sizes,

this could have meant next to no oil whatsoever on day one, however more than 295 today and on other more recent days.

they also do not want to leave 16az on the test facilities for its life span - more permanent production facilities will have been installed. They only put it on production on the test facilities to get some oil out and sell it, as this was before the fund raising.

imo

i agree - the fact that PH didn't communicate to the market that the well wasn't pumping can probably be debated for ages and is he guilty of not releasing price sensitive information - I would say going from 700bopd to zero is price sensitive on the only real producer in the company, however it is in the past now and I suspect he has been grilled over it already.

looking forwards...

we are at 295 bopd, cleaning up and are likely to see a substantial increase in the rate soon.
38 spud will be not far off.
ops update and seismic to come.
norio and satskehni have such low costs, they are profitable, just about, where they are and are not the primary focus.

wr16az

tested at 1500bopd with oil and drilling fluids being seen.
stabilised at 1100bopd and put on test facilities.
shut in for a 72 hour period.
came out of shut in period at 700bopd - nothing further said - market was under the impression they were pumping at this rate.

mid may, new presentation launched - no mention of 700bopd at 16az, yet stated the bopd rates for norio and satshkeni of about 6bopd and 10-40 bopd.

This means 16az was shut in sometime between mid april and mid may.

1st July rns stating "restarting in 7 days"
26th July states restarted on 11th July and currently cleaning up with production at 295bopd plus gas.

This means to me that the well, being on the test facilities was shut in not long after the mid april announcement and has been up until 11th july - hence it is cleaning up now.

I would say zero production for over two months from wr16az at least.

i reckon that once we will bigbench.

Once clean up is fully complete and the well is at its optimal level, then this stock should easily be back in the 11p range.

another comment from that site....

From personal experience, it is better to gradually clean up the well to ensure completion integrity is not compromised..

https://oges.info/question/3388/oil-producer-clean-up-best-practice

Clean up procedure depends on your surface facilities and your tolerance for debris in your surface facilities and a few other variables.

Not sure what your bottom hole completion is but let's assume it is cased.

Best option is to perforate under balance. This gets the perforation tunnels nice and clean and stops influx into the reservoir. The next stage depends on your surface.

If you can tolerate debris then after you have perforated I'd suggest flowing at a reasonable rate to lift everything out the well: completion fluid, sand, debris, oil. The rate obviously has to be controlled and not at a rate that compromises surface integrity.

If you can't tolerate debris then you might want to flow slowly or stop flowing then bring the well on slowly. You might want to do this if you expect a lot of sand.

In both cases you'll need to work out if the well can flow naturally or you need the gas lift to lift the well. The capacity of the export or flare will also end to be considered.

My preference is to keep flowing so the well is cleaned of fluids thereby giving the well the best chance of having a minimum skin.

Things to consider:

Reservoir competence and amount of debris expected.
Completion type.
Surface facilities and tolerance for debris.
How long completion fluid has been against reservoir.
If you are trying to flush out completion or drilling lost fluid material.
Well production potential rate.
And finally...what the objectives of any clean up and test may be.

Nearly every well is different.

Hope this helps.

Disclaimer: my own opinion.

-------------------------------------------
Michael Scott
Project Development Manager
Chevron Australia Pty Ltd
PerthWA
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yep - I was surprised a bit from an investor perspective of some throwing in the towel, especially as we have gone from 26bopd at norio/satskheni when breakeven at the corporate level is 100bopd, to 295bopd at 16az plus 26 from the other fields and there is more to come.

I am not surprised by the market reaction though!

sounds promising !

thanks for that starbuck - I was wondering what the timeframe was from heavier drilling fluids removed to oil supplanting it and hitting its natural flow rates.

enjoy the pub!

They stated polymer in the rns regarding drilling fluids. During drilling, this must be kept circulating, otherwise the cuttings settle quickly and can jam the string. So, if the well was shut in - did they pour loads of heavy polymer fluid in to stop the well.

Now they have to flush it out, to get it going again. Could be one reason why, as I would have thought it would have been cleaned up during the initial 1000bopd testing, to remove the cuttings etc.

not an oilman, so any other comments would be useful from more knowledgeable posters.

yes definitely won't have the same problem with 38 when it goes on production.

if they were from earlier, then it would state that in the trade type - ie late reported, historical, delayed reporting etc.

and when you scan the list of trades today, you see these trades in place, at the time they were executed. The quoted prices at the time and other trades at the same time, show these larger trades to be buys.

we saw just shy of 3m shares purchased in 1 x 900k lot, three 500k lots and one lot of just over 500k today. Those are the ones I saw, there will be have been other decent sized purchases.