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News from IOC
#31

'ArtM72' pid='16531' datel Wrote:Pet - Thanks as always for your insight. A couple of basic question if you don't mind. First, is it correct to assume that the formation draw off is most likely to be from near the bottom of the wells given there is where the highest condensate fraction is seen, with higher areas only opened up only as necessary to keep the LNG plant running at capacity? Next, I haven't seen anything that suggests testing will be done to record how flow tests at any E/A well influence the static pressures seen at the others. I would think this to be an important test. Have I missed something along the way? Best regards,

Art- Remember this is just one man’s opinion.

1. I believe that the most important thing in the operation of this field will be to keep the LNG plant fully loaded. In order to do this I think they will want all of these wells to be capable of producing in excess of 100 MMCFD. So far the bottom of the zone where IOC suggests the liquid content is higher has been low porosity and permeability and will not be capable of producing at the desired rates. It is possible that they could drill a horizontal hole in the bottom of the reservoir and get the desired volume but I do not think IOC or the new operator will do that. Another problem with doing this is that the producing zone would be near the gas/water contact and the producing well would begin to produce water soon after beginning production. Their main interest will be to have a smooth running operation with no worry about having enough gas to load the LNG plant. GLJ has said they do not see that much difference in the liquid content of the gas with depth.

2. Regarding the recording of reservoir pressure (bottom hole pressure) in offset wells while testing a new well, this would seem like a good idea but it may not be so easy to accomplish. In fact it sounds like such a good idea that I suggested it to the highest level of this Company in an email dated 1/31/2009. This was prior to the testing of Antelope-1. I did not receive nor did I expect an answer.

There are many things that we do not know that would come in to play here. For example this technique of trying to prove reservoir continuity would probably work much better in Texas where you might have one relatively thin zone with good porosity and permeability and a much closer well spacing.

I now know that Elk-1 is in a different fault block so it would not have been appropriate to put a pressure recorder there to check continuity with Antelope-1. I am not aware of how Elk-4 was left when operations were suspended but my guess is that the producing zone was plugged off for safety purposes.

I believe most of these wells are plugged off down hole for safety purposes when operations are suspended so it is not possible to record the reservoir pressure at the other locations.

For this to be successful in such a large reservoir with the wide well spacing in a relatively low porosity reservoir it would probably be necessary to flow the well for an extended period and both wells would need to be completed in the same zone of the reservoir. For example in Antelope-1 the massive gas reservoir is now sealed off behind pipe and only a very thin zone at the bottom was left open with the intent of making a long term test to see if they could prove the presence of oil or high liquid content gas in this very tight zone at the bottom of the reservoir. As far as I know the test was never done. With Antelope-1 only open in the lower tight zone I doubt that such a pressure test would be successful. Antelope-2 was temporarily plugged down hole when operations were suspended. In any case the massive gas zone was sealed off behind pipe in order to do the horizontal drilling.

So we will not be seeing any pressure readings from offset wells while testing Antelope-3.

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#32

petrengr1 dateline='<a href="tel:1359079222">1359079222</a>' Wrote:

ArtM72 dateline='<a href="tel:1359068319">1359068319</a>' Wrote: Pet - Thanks as always for your insight. A couple of basic question if you don't mind. First, is it correct to assume that the formation draw off is most likely to be from near the bottom of the wells given there is where the highest condensate fraction is seen, with higher areas only opened up only as necessary to keep the LNG plant running at capacity? Next, I haven't seen anything that suggests testing will be done to record how flow tests at any E/A well influence the static pressures seen at the others. I would think this to be an important test. Have I missed something along the way? Best regards,

Art- Remember this is just one man’s opinion.

1. I believe that the most important thing in the operation of this field will be to keep the LNG plant fully loaded. In order to do this I think they will want all of these wells to be capable of producing in excess of 100 MMCFD. So far the bottom of the zone where IOC suggests the liquid content is higher has been low porosity and permeability and will not be capable of producing at the desired rates. It is possible that they could drill a horizontal hole in the bottom of the reservoir and get the desired volume but I do not think IOC or the new operator will do that. Another problem with doing this is that the producing zone would be near the gas/water contact and the producing well would begin to produce water soon after beginning production. Their main interest will be to have a smooth running operation with no worry about having enough gas to load the LNG plant. GLJ has said they do not see that much difference in the liquid content of the gas with depth.

2. Regarding the recording of reservoir pressure (bottom hole pressure) in offset wells while testing a new well, this would seem like a good idea but it may not be so easy to accomplish. In fact it sounds like such a good idea that I suggested it to the highest level of this Company in an email dated 1/31/2009. This was prior to the testing of Antelope-1. I did not receive nor did I expect an answer.

There are many things that we do not know that would come in to play here. For example this technique of trying to prove reservoir continuity would probably work much better in Texas where you might have one relatively thin zone with good porosity and permeability and a much closer well spacing.

I now know that Elk-1 is in a different fault block so it would not have been appropriate to put a pressure recorder there to check continuity with Antelope-1. I am not aware of how Elk-4 was left when operations were suspended but my guess is that the producing zone was plugged off for safety purposes.

I believe most of these wells are plugged off down hole for safety purposes when operations are suspended so it is not possible to record the reservoir pressure at the other locations.

For this to be successful in such a large reservoir with the wide well spacing in a relatively low porosity reservoir it would probably be necessary to flow the well for an extended period and both wells would need to be completed in the same zone of the reservoir. For example in Antelope-1 the massive gas reservoir is now sealed off behind pipe and only a very thin zone at the bottom was left open with the intent of making a long term test to see if they could prove the presence of oil or high liquid content gas in this very tight zone at the bottom of the reservoir. As far as I know the test was never done. With Antelope-1 only open in the lower tight zone I doubt that such a pressure test would be successful. Antelope-2 was temporarily plugged down hole when operations were suspended. In any case the massive gas zone was sealed off behind pipe in order to do the horizontal drilling.

So we will not be seeing any pressure readings from offset wells while testing Antelope-3.

Pet..great posts.

Thought I'd chime in:  we routinely leave bottom hole gauges in deep water west Africa wells that are suspended (appraisal wells that can later be completed for production) and record the pulse seen as a result of offset DST and injection well tests.  We collect the data from an intervention vessel using sonar equipment to download the data.  I haven't seen any evidence that IOC has done this but I would, as pet had suggested back in 2009, certainly think that this would be critical in establishing continuity. Otherwise the reserves auditors are especially stingy with assessments. Understanding these are different reservoirs I'd still expect a 2-3 day high rate DST to cause a pressure pulse in an offset well...if connected. Although I have t done the analysis.

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#33

'ltinvest' pid='16453' dateline='<a href="tel:1359035 Wrote:"The InterOil Board of Directors intends to meet the Company's advisors during the first week of March 2013 for the purpose of evaluating bids received and selecting our partner(s)" I'll be looking forward to the March conference call!

My takeaways:

-  PA must be done.  It would be ludicrous to announce feb28 deadline if this weren't in the bag

-  takes a very confident process to enable releasing a date like this...the competition for these resources is more than enough to offset any risk that either another bidder/company or PNG is able to derail this

-  really keen to find out terms of PA...that would be nice interim announcement in feb.  curious how gov't take & terms ended up

good job IOC.  Fantastic news release.   I do not believe they will announce anything prior to feb28 closing date for binding bids..unless of course all bidders deliver ahead of this drop dead date.  Could happen...seems more likely that IOC gets purchased as soon as the PA is inked.

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#34
I agree with petro. Nada until Feb 28th. When IOC board makes its announcement those Confidentiality Agreements are null and void. What will the losers do???They taint walking away without another shot .This sell down could be a takeover war thats lasts like Cove Energy 6 months????
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#35
I'm hoping we get DST results, Elk3 spud and maybe some insight into the PA agreement before Feb 28th. Those things would be nice "previews" for the main act
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