I see that it has been broght back to life. Since we don't have to reinvent the wheel everytime, now is as good a time to point people to the discussion at the end of a SA article: between a few people
- Feeltheheat (aka Bostonkenmore)
- Bonkthegrups (aka Keubiko)
- Indoreservoir
For clearity, the posts below are answers from Indoreservoir, but he usually repeats the points he's responding to.
Here is IndoReservoir responding to 7 points from Boston
Dealing with your technical points in “ “ and largely skipping the economics comments as others are more qualified than I to assess these, my comments are:
“1. Other wells drilled in the Eastern Papuan basin have initially flowed hyrdrocarbons but when run for an extended period time flowed water.”
Is this from the 1958 (yes, 1958!) news story in the 2012 Invest for Kids presentation someone posted over at Yahoo? Or do you have other data? That news story refers to a well which flowed oil, was sidetracked and then produced water. Big deal - they had a small oil accumulation and drilled the sidetrack into the water leg. Happens quite frequently in oil and gas, as operators seek to find the oil-water contact with the drill bit. This Puri field was some 10 km west of Elk/Antelope. So what?
I've searched IHS and WoodMac, and find no indications of other oil or gas producers in the IOC area watering out after extended testing, as you suggest. If you have some data/info, please advise (and please don't be condescending with nonsense like 'do your own due diligence' - show me the data, please.)
#2-4 – skip as economics – however, I will point out that your estimate of $10-20 billion is a decent range, but I’d guess that $12-15 billion (IOC estimates $8-9) would be more appropriate given the $19 billion cost of XOM’s plant, much further away.
I also note that 9TCF of gas, even at a very low LNG price of $10/mmbtu, is about $90 billion dollars in revenue. I reckon I could make those economics work!
“#5 Though Interoil has drilled seven wells since the Elk discovery in 2006, they have drilled may more in their history, only three of those have been at Antelope which is where the vast majority of the OGIP rests according to GLJ. All three wells have been very close together.”
Antelope 1 and 2 were about 2.1 miles apart – this is NOT ’very close’ as you suggest. Antelope 3 was drilled between these wells to prove continuity, which it did. Further, in a roughly north-south direction, they have drilled wells in Elk/Antelope over an 8-mile distance.
“#6 The one well drilled farther off, Elk-2 flowed water.”
All wells flow some water (water of condensation, and often load and/or drilling water) and I cannot find the DST results for Elk 2 to confirm it flowed formation water. WoodMac notes that Elk-2 was spudded in February 2007. The well was located five kilometres north of Elk-1 and was drilled downdip, aiming to validate the data gathered during the drilling of Elk-1. Elk-2 aimed to intersect the GWC, determine the extent of the gas column and assess the extent of the fracture system in the Mendi Limestone. The GWC was not intersected.
On Elk 2, as mapped you can clearly see its off the current structure map at the very northern tip of the accumulation. This is what happens in oil and gas exploration and appraisal. Hence they went south from Elk 1 and found substantially more gas. Indeed, they've got gas wells in an 8-mile line across the reservoir - this is VERY good news.
And the significant fracturing AND high matrix porosity in their reservoirs augers VERY well for long-term productivity. This is no Beaver River field (Amoco Field in British Columbia, Canada in the 1970s), of that we're certain.
“#7 According to the link below, an extended well test would provide a "greater radius of investigation". “
This is undoubtedly true – the longer you flow the well, the greater the radius of investigation. The real question is whether this provides critically required data.
The paper you linked to was co-authored by an Expro person (guess what they sell/rent – well test packages), and was only one field out of the several hundred/thousand OIL fields discovered and appraised every year. Extended well testing is a rarity, and is not needed IF you have sufficient data from drilling and ordinary well testing (which IOC clearly does). And its less common on gas fields - typically EWTs are needed to test faulting and transmissibility across those faults for waterflood/pressure maintenance operations and also to estimate the number of wells needed to develop an OIL field, not a gas field.
For example, here is a story today from Upstream magazine – NO TEST needed. Hmm.
________
Upstream Magazine
13 March 2013 02:48 GMT
ConocoPhillips has elected not to carry out a production test on the Zephyros-1 well on Block WA-398-P, in the Browse basin, off north-west Australia.
Well partner Karoon Gas Australia said wireline logs were being acquired, with 108 metres of core core cut and recovered to surface.
It revealed, however, that the joint venture had decided not to carry out a production test on the well due to similarities between it and the Kronos-1 discovery, adding the core and wireline data set provided “a sufficient data set” for ongoing field evaluation work.
The joint venture believes a production test at Zephyros-1 would flow at similar, tubing constrained,rates to Kronos‐1, which flowed at a rate of 26 million cubic feet per day during a drill-stem test in 2010.
_______
“Given these facts, how can a potential buyer be so sure that the wells will not saturate with water without actually physically testing for that? So sure that they are willing to risk a multi-billion dollar investment. Wouldn't they want to know the extent of the reservoir which an EWT would tell them?”
The bottom line is that there IS an extensive core, log and well test database that a potential buyer can and certainly has used for evaluating the assets. An EWT will NOT necessarily tell them the extent of the reservoir – seismic and the drill bit are used for that, and they have been in Elk/Antelope.
Feeltheheat - enjoy the dialogue. Please accept my comments in the constructive manner I've offered them (and accept some sarcasm, please.)


