She is a Giant!!

[Getitrt2]

I think that bond payoff will have little if any effect on the stock, given there should be nothing surprising of any kind. Actually, perhaps it could even be a little positive, with the Company becoming completely free of any long-term debt, especially in this environment of energy companies with heavy debt loads. IOC is all about giant and growing undervalued assets, giant contractual payments, unrelated to oil or gas prices, pending receipt for part of those assets, and giant promise for their highly profitable development underway with a major partner, Total.

[petrengr1]

Looks like I was too optimistic in interpreting the cross section at http://tinyurl.com/p5bttdy page 5.  

Apparently the dolomite section is not thickening to the south as depicted in the cross section.

Today's Press Release says the dolomite section is 182 meters (597 feet) thick but the total gas column is 339 meters (1,112 feet) thick as expected. So the thickness of the dolomite is similar to what we have seen in other wells. The good news is the top of the formation is still 1,112 feet above the gas/water contact and the dolomite continues to the south and southeast.

So it is still possible that someday we will drill a well low enough and far enough to the south or southeast to find dolomite all the way to the gas/water contact. So far the lowest well we have drilled at Antelope has a gas column of 1,112 feet, 54% of which is high porosity dolomite. I would like to see what the gas/water contact looks like on logs in high porosity rock.

I was happy to see that they now believe the gas/water contact is deeper than they have previously interpreted as I have been suggesting as late as last night. They have been using -2214 meters sub sea and GLJ had used -2228. As I posted last night at http://tinyurl.com/qad4yjg post 42, IOC Tested Antelope-1 ST-2 at depth of -2,220 to -2,253 meters sub sea and recovered 1.4 MMCFD gas and 23.8 BPD of condensate. Getting the Engineering firms that are doing the reserve calculations to agree to the lower gas/water contact would be an important accomplishment. It is a pretty big deal if we can get the gas/water contact lowered at least back to the original GLJ number of -2,228 meters sub sea. That would make a significant impact on the resource calculation when you include an additional 14 meters of gas pay over the entire area of the Antelope Field.

[sageo]

Looks like I was too optimistic in interpreting the cross section at http://tinyurl.com/p5bttdy page 5.  

Apparently the dolomite section is not thickening to the south as depicted in the cross section.

Today's Press Release says the dolomite section is 182 meters (597 feet) thick but the total gas column is 339 meters (1,112 feet) thick as expected. So the thickness of the dolomite is similar to what we have seen in other wells. The good news is the top of the formation is still 1,112 feet above the gas/water contact and the dolomite continues to the south and southeast.

So it is still possible that someday we will drill a well low enough and far enough to the south or southeast to find dolomite all the way to the gas/water contact. So far the lowest well we have drilled at Antelope has a gas column of 1,112 feet, 54% of which is high porosity dolomite. I would like to see what the gas/water contact looks like on logs in high porosity rock.

I was happy to see that they now believe the gas/water contact is deeper that they have previously interpreted as I have been suggesting as late as last night. They have been using -2214 meters sub sea and GLJ had used -2228. As I posted last night at http://tinyurl.com/qad4yjg post 42, IOC Tested Antelope-1 ST-2 at depth of -2,220 to -2,253 meters sub sea and recovered 1.4 MMCFD gas and 23.8 BPD of condensate. Getting the Engineering firms that are doing the reserve calculations to agree to the lower gas/water contact would be an important accomplishment. It is a pretty big deal if we can get the gas/water contact lowered at least back to the original GLJ number of -2,228 meters sub sea. That would make a significant impact on the resource calculation when you include an additional 14 meters of gas pay over the entire area of the Antelope Field.

Pet-If we do wind up with 46 more ft. of pay in Antelope, I will give a "hoot and a holler"" border="0" class="smilie" src="http://shareholdersunite.com/mybb/images/smilies/biggrin.gif" />

[Getitrt2]

I have been looking at the last couple of presentations again (since we have nothing else to look at) and I think I am seeing a couple more indications that “She is a Giant!!”. Let me see if I can explain what I am thinking.

1. First, let’s look at http://tinyurl.com/p5bttdy page 5. This East/West cross section indicates, in the post drill picture at the bottom, that they think the reef extends all the way to the gas/water contact to the West. I believe there is an error in this chart and it appears that IOC also believes the same as shown on page 6. A cross section from Antelope-3 to Antelope-5 is more of a North/South cross section than it is an East/West cross section (see map on the right). You will also note that the formation no longer dips to the West on this map but it stays high all the way to the fault. There is no gas/water contact to the West. Instead we will have “wedge” of reef that gets thinner as it approaches the fault and it is too high to have a gas/water contact to the West. You can see on this latest map that most of the area to the West of Anteople-5 is even higher than Antelope-1 and Antelope-5 and about the same as Antleope-3 which is the highest well in the Field.

2. I really like this new map much better than the old maps shown on http://tinyurl.com/q2lzmbq pages 9, 10, 12 - 15 etc. Of course one reason is that the new map shows all of the area to the West as being higher and thus containing more gas than the old map would have allowed. Another reason is the intriguing area to the Southeast on the new map at http://tinyurl.com/p5bttdy page 6 which I will discuss below.

3. The new map on page 6 does not do justice to the size of the field because it does not show all of the area of the field that is above the gas/water contact. You can see a  little piece of the gas/water contact which is the dotted line in the northeast corner of the map by the big N. So the entire area of this map is filled with gas and there is  more to the North, East and South that is not shown on the map.

4. The intriguing area to the Southeast is interesting because that is where we are drilling the side track at Antelope-4. It is intriguing because to the Southeast of Antelope-4 the formation is no longer going down dip but it is going up dip a little and the map does not show how big this area is. The gas/water contact is at -2,214 meters sub sea so every thing above that depth contains gas. As you can see the map is only showing us the area that is above -1,900 / -2,000 meters sub sea in the Southeast corner of the map. So there is a lot more area to the Southeast that is gas filled but is not shown on this map.

5. Now let’s turn our attention to the North/South cross section on page 6. You can see that the distance from Antelope-1 to Antelope-5 is 2.5 km. Using this measurement we can determine that it is about 5 km from Antelope-1 to Antelope-4.  Now looking back at the map you can see that if it is 5 km from Antelope-1 to Antelope-4 then there is another 2 km of gas field to the Southeast of Antelope-4. This is just the area that is shown on the map and it is clear that the productive area is larger than what is shown on the map because it does not include the area all the way down to the gas/water contact at  -2,214 meters sub sea.

6. Looking again at the cross section on page 6 you will see that if we just talk about the high porosity limestone cap and the dolomite section (where about 95% of the gas is located) Antelope 5 has the thickest section of good rock. You will also notice that the dolomite section is getting thicker to the South. Antelope-2 had the thickest dolomite zone drilled to date. What is South of Antelope-2? That would be Antelope-4 and Antelope-4 ST-1. From the picture of the cross section you can see that if they are kicking the well to the South (or Southeast) that it is quite possible that we could have dolomite from the top of the zone all the way to the gas/water contact. We know from the September 18th  Press Release http://tinyurl.com/pse9bd5  that Antelope-4 ST-1 found the top of the reservoir 36 meters higher than Antelope-4. We were previously told that they found the top of the formation at Antelope-4 at -1,911 meters sub sea. So Antelope-4 ST-1 found the top of the formation at -1,875 meters sub sea. We expected to find a gross gas column thickness at Antelope-4 of (-2214 - 1,911) or 303 meters or 994 feet.

Now we find the top 36 meters higher at Antelope-4 ST-1. The vertical thickness of the gross gas column at that point would be (303 + 36) 339 meters or 1,112 feet. The deviated hole will be somewhat thicker due to the angle of the hole. This may sound like a pretty thin zone when compared to the +/- 2,200 foot gas column up dip but I can assure you that people anywhere in the world would die for a 1,112 foot gas column in 100% dolomite. Let’s hope that is what they report after reaching TD.

Have a good evening!!!

Pet, thanks for the extremely interesting, worthwhile, and positive commentary.

Given that the cross section is north-south, Ant 5 is south of Ant 1, and Ant 4 is mostly southeast of Ant 5, it seems to me that the distance from Ant 5 to Ant 4 is actually more than 2.5 km, in fact significantly more, based on my impression of the reservoir map insert and understanding of geometry.  That, I think, would be an even more positive interpretation of what we are seeing and hearing.  Would you agree?

In response to people complaining about the delays with and resulting from the extended Ant 4 ST in recent weeks, I have been trying to point out the very positive impressions I have had of the decision to take time to drill it and the ramifications there seemed to be of higher 100% dolomite much further south, without seeming to have much effect.  It is nice to have confirmation of those impressions and comments from you with the much greater credibility you can offer in such areas, not to mention the extremely insightful and positive aspects about the western parts of the formation you have identified and evaluated and pointed out to us.

In spite of the limited information and the concerns, I think this management knows what they are doing and are effectively pursuing what they see as in the best interest of shareholders.  I think they want to be very careful and not get ahead of what they know, and now they have taken action to move ahead with Ant 6 while still being able to thoroughly do everything they want with Ant 4 and the side track, all in consultation with and with the approval of Total.  As far as I know, we still have no information on the Ant 7 decision related to your comments on the western parts of the formation.  It will be interesting to see whether they think that is needed and worthwhile, and what the decision is with Total.  Any comments on that?

Thanks again for your efforts and valuable comments.

Getit-Regarding the distances between wells, when I put my ruler on the cross section and the map at http://tinyurl.com/p5bttdy page 5,  I find that the distance from Antelope-1 to Antelope-5 and the distance from Antelope-5 to Antelope-4 to be more or less exactly the same. This is the straight line distance from one well to the other. I also check it out on the maps at   http://tinyurl.com/q2lzmbq pages 9, 10 and 12. These maps have a scale at the bottom so you can check the distance between wells.

I have no information regarding the likelihood of Antelope-7 being drilled to the West before or after the certification. I would prefer that it be drilled before certification but I do not want certification delayed beyond mid-year 2016. To accomplish both they need to “get on it” without delay. I think they should drill some wells to the west in order to establish a better (firm) location of the fault.

Here is a bonus for you. I think if they find 300 meters of dolomite at Antelope-4 ST-1 they will eventually need to drill another well southeast of Antelope-4 to determine how far the thick dolomite extends. We had about 200 meters of dolomite at Antelope-1, about 170 meters at Antelope-3 and 250 meters at Antelope-2. Since the dolomite seems to be thicken to the South it is quite possible that Antelope 4 ST-1 could find 300 meters. See  the cross section at http://tinyurl.com/p5bttdy page 5.

Pet:  IOC said they encountered dolomite at the top of the Ant 4 reservoir, thus the representation of that on the Aug 13 page 6 cross section.  However, they were not able to drill it to target depth, and apparently as far as I recall did not do or report any logging or core testing for the vertical Ant 4 well.  Now they are reporting that wireline logging from the Ant 4 ST 1 "measured 182 vertical meters (597 feet) of dolomite and a vertical gross gas column of about 339 meters (1,112 feet)".  I would say that is very positive, along with the indication that "the field-wide gas-water contact is deeper than previously interpreted".  However, I assume that means they do not have the 300 meters plus or 1,112 feet of 100% dolomite shown in the cross section and that you discussed as a possibility.  What is your assessment of all that?  I guess it means there is some portion of at least somewhat lower porosity, perhaps at the bottom of the column.  Also, I guess it means less or no need to eventually drill another well southeast of Ant 4 as you mentioned above, unless they eventualy want to test the higher formation area indicated to the southeast, although not for certification, of course.

Thanks again for your response and all your extremely helpful contributions.

Pet: OOPS! I don't know how I missed your latest comment above after the Nov 18 PR, sorry about that. I was reviewing earlier posts and doing some research, and responded to this one without checking for the newest ones well enough.