3 out of 7

[johnwgrant]

From transcript:  "Now, of course, we would like every exploration well to come in. But as we push into new and more frontier areas in our licenses, that is statistically improbable. The typical strike rate for a global exploration is about one success for every 10 wells. In the Gulf region, which is underexplored, we have a strong success rate having found gas with three of the seven wells we have drilled."

Question:  If we have had 4 "no-discovery" wells as Hession states, which ones are they ?   ELK-2 plus ... ???   Is he going way back in history ?

[petrengr1]

From transcript:  "Now, of course, we would like every exploration well to come in. But as we push into new and more frontier areas in our licenses, that is statistically improbable. The typical strike rate for a global exploration is about one success for every 10 wells. In the Gulf region, which is underexplored, we have a strong success rate having found gas with three of the seven wells we have drilled."

Question:  If we have had 4 "no-discovery" wells as Hession states, which ones are they ?   ELK-2 plus ... ???   Is he going way back in history ?

The exploration wells that IOC has drilled are :
1. Moose-1
2. Moose-2
3. Sterling Mustang-1
4. Black Bass-1
5. Triceratops-1
6. Elk-1
7. Elk-4A (Discovered Antelope by accident)
8. Triceratops-2 (This well should have been called an appraisal well based on the 1959 Bwata-1 discovery but since IOC and their drilling partners had drilled Triceratops-1 as an exploration well and called it a dry hole, Triceratops-2 was called an exploration well.

Elk-2 was a dry hole but it was an appraisal well to follow up the Elk-1 discovery. Elk-3 has not yet been drilled.

Now drilling:
9. Bobcat-1
10. Wahoo-1
11. Raptor-1

This may not be perfect but it is pretty close.

[Putncalls]

But Pet?

It's the LAST three out of the last seven wells. That curve matches that of the "ultimate transistor" which switches from off to on as the voltage is raised at the controlling metal contact.

[Thylacine-2]

But Pet? It's the LAST three out of the last seven wells. That curve matches that of the "ultimate transistor" which switches from off to on as the voltage is raised at the controlling metal contact.

Yes, Puts, it looks like there has been a step change since the first four wells (dry) were drilled.  We might have gotten lucky with Elk and Antelope.  But now IOC's understanding of the geology has matured, there has been a step change in the level of research for selecting targets (look at all that seismic!),  and drilling is now done with rigs which are up to the job.

Hession was prudently attempting to lower expectations for the exploration wells at the CC. Underpromise and Overdeliver is a good policy for a CEO.

But our board's own resident petroleum engineer estimates a probability of success in the 80 to 90 percent range for each of the three exploration wells. What is the "reality'?

My own expectations have not been lowered. :-)  The picture I see and am betting on is that the conditions of Source, Reservoir Rock, and Trap are satisfied for most of the apparent reefal prospects on IOC's licenses.  My expectation is that the three exploration wells being drilled will be commercial.

We will soon see.  These are exciting times.

[Palm]

I think it's better to temper our expectations and "expect" one of the three to be successful. They've already encountered some problems with Bobcat and Raptor is very deep. Exploration wells are just that and 2D seismics are only so accurate. T2 as Pet said still doesn't prove out much and that was one of the last three. And note his comments on the possible complexity of the formation. Ant 2 was a nice hit and Ant 3 was a pretty sure bet. Now we are in promising but exploratory territory once again. I'm hoping one of the three hits and would love for it to be Wahoo which we should know about first.

[sageo]

Thy and Palm- Thanks for sharing your thoughts. I guess I am in between.....hoping (strongly) that we hit 2 out of the 3. If we get oil in one of them(as Phil once said,"there is oil down there somewhere"....or words to that effect),then we really will be excited. Yes,Pet has commented on the possibility ( As per new proposed location for T3) that our Tricera field may have more complex geology than first perceived. Palm,I too am hoping that Wahoo will be our first success ( if we hit some) . That would certainly go a long way in lifting our spirits!  [You also mentioned A2 and A3 ......to this day I still wish we would have drilled Elk 3 when we had the rig sitting there.I'm sure the results would have been outstanding.]  No,not a 100 % deal that is true, but 99 % ain't bad. Thanks again guys for all your sharing.

[sageo]

From transcript:  "Now, of course, we would like every exploration well to come in. But as we push into new and more frontier areas in our licenses, that is statistically improbable. The typical strike rate for a global exploration is about one success for every 10 wells. In the Gulf region, which is underexplored, we have a strong success rate having found gas with three of the seven wells we have drilled."

Question:  If we have had 4 "no-discovery" wells as Hession states, which ones are they ?   ELK-2 plus ... ???   Is he going way back in history ?

The exploration wells that IOC has drilled are :
1. Moose-1
2. Moose-2
3. Sterling Mustang-1
4. Black Bass-1
5. Triceratops-1
6. Elk-1
7. Elk-4A (Discovered Antelope by accident)
8. Triceratops-2 (This well should have been called an appraisal well based on the 1959 Bwata-1 discovery but since IOC and their drilling partners had drilled Triceratops-1 as an exploration well and called it a dry hole, Triceratops-2 was called an exploration well.

Elk-2 was a dry hole but it was an appraisal well to follow up the Elk-1 discovery. Elk-3 has not yet been drilled.

Now drilling:
9. Bobcat-1
10. Wahoo-1
11. Raptor-1

This may not be perfect but it is pretty close.

Pet- Pretty close "and a cigar"! Good job,sir.Concerning Triceratops,when I looked at the new 'proposed T3 location',I started to wonder so I went back to March and May of 2011 to review the contour maps of that time-frame.It appears that they now believe more strongly that this rise in the formation to the north(and slightly westward) has more merit than first believed.Could their thinking now be that the lower zone encountered in T2 (which was water-filled) is at a higher elevation in the proposed T3 and might contain oil? I remember vaguely about some oil-talk in T2 at some point. Maybe I'm just "reaching" again,but it seems at least a possibility TIA for your thoughts.

[petrengr1]

From transcript:  "Now, of course, we would like every exploration well to come in. But as we push into new and more frontier areas in our licenses, that is statistically improbable. The typical strike rate for a global exploration is about one success for every 10 wells. In the Gulf region, which is underexplored, we have a strong success rate having found gas with three of the seven wells we have drilled."

Question:  If we have had 4 "no-discovery" wells as Hession states, which ones are they ?   ELK-2 plus ... ???   Is he going way back in history ?

The exploration wells that IOC has drilled are :
1. Moose-1
2. Moose-2
3. Sterling Mustang-1
4. Black Bass-1
5. Triceratops-1
6. Elk-1
7. Elk-4A (Discovered Antelope by accident)
8. Triceratops-2 (This well should have been called an appraisal well based on the 1959 Bwata-1 discovery but since IOC and their drilling partners had drilled Triceratops-1 as an exploration well and called it a dry hole, Triceratops-2 was called an exploration well.

Elk-2 was a dry hole but it was an appraisal well to follow up the Elk-1 discovery. Elk-3 has not yet been drilled.

Now drilling:
9. Bobcat-1
10. Wahoo-1
11. Raptor-1

This may not be perfect but it is pretty close.

Pet- Pretty close "and a cigar"! Good job,sir.Concerning Triceratops,when I looked at the new 'proposed T3 location',I started to wonder so I went back to March and May of 2011 to review the contour maps of that time-frame.It appears that they now believe more strongly that this rise in the formation to the north(and slightly westward) has more merit than first believed.Could their thinking now be that the lower zone encountered in T2 (which was water-filled) is at a higher elevation in the proposed T3 and might contain oil? I remember vaguely about some oil-talk in T2 at some point. Maybe I'm just "reaching" again,but it seems at least a possibility TIA for your thoughts.

Sageo- Sorry, I see no reason to expect oil at Triceratops-3. Including Bwata-1, three wells have been drilled at Triceratops. As far as I know they have never mentioned finding any oil.

In 2011 the picture at http://tinyurl.com/ph95fe7 page 15 they showed Reef B to be a little higher at the peak than Reef A. At the time they did not even show the reef to the southwest of Triceratops-2. Note on this map they show the Reefs A and B to be less than 500 meters sub sea. On the 2012 picture the top of the reefs are shown to be at something less than 1,200 meters sub sea. http://tinyurl.com/may8c52 page 24. They even had problems deciding where the top was when they were drilling Triceratops-2 and they changed the reported top about 3 times. On this map it appears that the top of the upper pay zone at Triceratops-3 will be at about the same elevation as it was at Triceratops-2. If that is the case then I would expect the lower zone (if present) will also be at about the same elevation as it was at T-2.

 Notice on the page 24 chart mentioned above that they show another "high" south of the Bwata Thurst Fault. It might also be of interest to look at http://tinyurl.com/n7tl8ph page 17 where they show that seismic line TG1305 has been extended to the south all the way off the chart. That might have some bearing on the Kereru Thrust Fault prospect shown at http://tinyurl.com/may8c52 page 22.

The new picture at http://tinyurl.com/n7tl8ph page 17 indicates that the “provisional” location for Tricertatops-3 is at what they were calling Reef B in 2011. This chart also refers to Triceratops-1 as one of  IOC’s “successful” wells. I guess it was successful in that they were able to drill it. Here is an excerpt from the final drilling report:

“Following setting the liner, a series of cased hole Drill Stem Tests (DST’s) were performed. The DST’s above the equivalent gas water contact in the offset Bwata #1 well which flowed 29 million SCF per day were tight while those below flowed water and noncommercial quantities of oil and gas.”

Dave Holland said he thought the 2nd reservoir they found below the Marl streak at T-2 was a local phenomenon in the area of Triceratops-2 and he thought the major part of the field would still have the gas/water contact found at Bwata-1.

The lower reservoir at Triceratops-2 tested gas, condensate and water. If there was any oil in this reservoir it should have shown up in that test since it produced condensate and water. At http://tinyurl.com/ka9q3ox page 15 they report that DST 10A tested 3 MMCFD with 45-60 Barrels of condensate/MMCF. They do not report producing any water but by some mysterious method they determined that the gas/water contact for the lower zone was at a depth of 1,611 meters measured depth. That depth falls within the test interval shown for DST 10A. That means that DST 10A had to produce some amount of water that was not reported. I think the only way for us to benefit from the better reservoir rock seen in the water bearing portion of T-2 would be to  move up dip to the southwest as previously planned and if we ever do that we should expect that better reservoir rock to contain gas not oil.