Drilling and the Minority Interest

[Indoreservoir]

E1, E3, A1, A2, A3 and T1 are six wells as I said. The intersection of the bit and the HCs was well predicted in all of these holes. E2 was pretty darn close. There is now a LOT of drilling data to review. With respect to Total I see no requirement for a successful "exploration well" with your POS of 10%. I also don't see why T2 or T2+ would be called an "exploration well" with a POS of 10%. Do you think that BP drilled Mandango thinking the POS was 10%? I guess all of SD WY ND MO and CO is so well known through drilling that ALL wells drilled there must be classified as appraisal wells? Then there is this strange coincidence that IOC's success rate increased drastically after expanding their seismic and gravity program. I suggest that new technology has changed the HC business.

Putncalls

You did say 6 wells in 8 years - my bad.

Its clear that the ONLY exploration well IOC has drilled is E1. All the others are appraisals - thats why they can predict formation tops accurately.

And its very troubling that appraisal wells E2 and T1 were wet (I think from the presentations I see - looks like T1 is right at the GWC from their Sep 12 presentation.) I'm not sure why you excluded E2 from your list, but never mind. So we had E1 and then missed on E2, and we had Bwata-1 and missed on T1 - doesn't this lead you to think we could be in for more surprises?

Again, I don't know if the POS will match industry 2D seismic averages of 10-20%, or whether it will be 30-40%, but ANYONE with G&G skills who is saying its in the 60-70% range is smoking something illegal in most states.

Total did not require an exploration well for E/A redetermination - they require 1-3 delineation (read 'appraisal') wells if I recall. These should have higher POS than the exploration well POS's I'm talking about, fwiw.

I also note I said POS of 10-20%, not just 10%. And it could be 20-30-40% (though I doubt the higher number) as I said before and others have pointed out.

BP's Macondo well was drilled on 3D seismic/well and I suggest you take a look at a Mississippi Canyon seismic map and compare that to PRL15 - you'll notice a huge difference in coverage, density, and offset information. So I'd guess Macondo had a 30-40% POS, maybe higher - I don't work the GOM so not sure what their numbers are.

And while you are doing that, take a look at well densities in those states you mention. I did a quick google search on 'average usa exploration well success rate" and the number IHS quoted for the year 2000 was 38%, which they say is about the 10-yr average. I'll again point out that much of this work was done on 3D seismic. You mention new technology, and this is a major one. Will post 2D seismic worldwide success rates if I can find it.

Cheers