What are the odds of drilling a dry hole at Triceratops-2?

[sageo]

Admin-Thank you. Good luck to all you guys(and gals).I admire your tenacity.

[petrengr1]

I have been playing with IOC’s numbers again. On the PR http://www.interoil.com/newsrelease/2012..._Final.pdf they say they plan to drill Triceratops-2 through the “entire reservoir interval” to a total depth of 7579 feet (2310 meters).

On http://www.interoil.com/presentation/201..._Final.pdf chart 15 they say they expect the top of the reservoir to be at 1320 meters (+/- 200)

Reservoir interval= 2310 - 1320 = 990 meters or 3248 feet.

The PR also says they expect to hit the top of the reservoir 1500 feet higher than the gas/water contact found at Bwata-1 so, based on that they are suggesting they expect a gross gas filled reservoir interval of 1500 feet. So less than half of the drilled reservoir interval is expected to be filled with gas.

Chart 15 is a cross section of the red line shown on the Phase 3 map on Chart14. So the reef falls off fairly quickly to the north. The highest part of the reservoir is along the fault to the south and west of Triceratops-2 is being drilled.

[sageo]

Pet-Again, thanks for all your time-consuming great work. I blew up to 200% page 14 concerning Tri/Bat field. As best I could tell from the contour lines it looks like the eastward extension might give us a drill site that would tag the reef(or lms)at a slightly lower elev.,but could still yield a significant gas column.Your thoughts please.

[petrengr1]

Sageo- Yes there is plenty of room for another location east of T-2. Southeast would be better. Look at the scale at the bottom of the map and you can get an idea how big the area shown is. With 62 square miles of closure there is plenty of room for locations. I tried to describe this map in my Masterpiece on Yazoo back of Nov. 16, 2011 http://messages.finance.yahoo.com/Business_%26_Finance/Investments/Stocks_%28A_to_Z%29/Stocks_I/threadview?bn=26290&tid=304359&mid=304359 If you look at the color code scale on the left side of the map on http://www.interoil.com/presentation/201..._Final.pdf chart 14 with some effort you can see that the dark blue starts at -1500 meters sub sea. The map is drawn with 50 meter contour intervals and is based on sub sea depths. If you look at chart 15 you will see that Knowledge Reservoir believes the gas/water contact is at -1500 meters sub sea for the Most Likely Case. Back to the map on chart 14 you will see that the dark blue starts at the -1500 meter sub sea contour line. So, everything on the map above the dark blue should contain gas. T-2 is on the -850 meter contour line. If the map turns out to be correct we should have (1500-850) 650 meters (2133 feet) of gas column at T-2. Latest word from IOC is they expect 1500 feet. I think they are just hedging their bets a little in case it comes in lower than expected.

I can see a string of locations right down the -1000 meter sub sea contour line 1 km apart. According to this map, wells drilled on the -1000 meter sub sea contour line would be expected to have a gas column of 500 meter (1641 feet) .I would also put one on the high spot north northwest of T-2 which shows a -900 meter contour which would give it a 600 meter (1969 feet) gas column. There are many locations that could be drilled with a 1600 foot gas column or more.

After thinking that over we can consider what is west and northwest of this map where the green and yellow goes off the map. Looks like room for more locations to the west and northwest of what is shown on this map.

Now the good news. I just noticed that all of the above comments are based on the Phase 2 Map. Now compare the Phase 2 map with the Phase 3 map and you will see that there is much less dark blue and purple on the map. Remember the dark blue and purple would be below the gas/water contact so there is much more gas filled rock on the Phase 3 map.

Trace out the contour lines on the Phase 3 map and you will see that the location for T-2 is on the 750 meter contour line instead of the -850 meter contour line mentioned above for the Phase 2 Map. So according to the Phase 3 map we should expect to see a gas column of (1500-750) 750 meters or 2461 feet. And again plenty of room to drill on the -1000 meter sub sea contour line or higher.

And yes I do now see the location you apparently see which is a good 8.5 km East of the T-2 location. There appears to be another drillable reef on the east side of the Phase 3 map that was not on the Phase 2 map. That was a very good observation on your part Mr. Sageo.

Here is a hint for everyone looking at this Chart 14 map. Put your computer on 100% and the scale at the bottom works perfectly at 1 centimeter= 1 km. It is 10 km from T-2 to the western edge of the map (field continues West) and it is 8.5 km East to the new reef noticed by Sageo. This thing is looking “bigger and broader”.

Have a good evening!!!

[Palm]

Pet and Sageo, thanks for this exchange. To read that this thing more than living up to its name sure takes away some of the frustrations and ups and downs we've had over the last year. I know Pet that you've said the comments we've gotten have confirmed your suspicion that management purposely cut off the Phase 3 edges until they can drill T2 and get more seismic work done on this formation. That's more than exciting. I know it's always dangerous to make the comparisons to Arun (and GLJ's Arun comment at Ant I believe was aimed at its potential productivity % and not the size of that formation), but some of that may be appropriate. You've already mentioned that Arun is a much deeper formation, but with what you know and see, how large would Tricertops need to be horizontally in km to start approaching even half the volume that Arun is? With this formation being less thick than Arun it seems it would be a great candidate for directional drilling. Any feedback is more than appreciated.

[maui4marko]

pet & sageo nice eyes and great analysis as always pet.

Q: could any of the string of locations and/or high spots support multiple wells (perhaps in diff directions) from a single pad? Using lessons learned from E/A could they "fill the gaps" to obtain max Ts with minimum drill loc's (with respect to GCA req's)?

[maui4marko]

palmreader - I see you have the same ? as I do re: directional... you been tappin' into the VO again?!?

[Palm]

Mauimindmeld, you did it again. Projected your thoughts across the pond through the use of the foil cap you invented. It really does work; I thought you were kidding. In that case I think you CAN make a living selling those things on the web. So either we are both going to look really smart here or you are going to look dumb because I'll blame my ideas on your foil beanie.

[sageo]

Pet,Palm,et.al. Gentlemen-thanks for those kind words about my input.If,and that's IF,we wind up in the future with 7-9 wells at Tri/Bat and build another CSP(wet NG),could we use the ROW from E/A to the gulf or would we consider selling the gas to XOM? Their pipeline might be fairly close to our very large res. at T/B.(I know,I'm thinking out loud again!) Also, thanks Supa for your fine commentary this AM.

[Palm]

Sageo, I think that one of several battles being waged right now in the bidding for IOC. We have E/A with Mitsui pretty well entrenched and JAPEX very familiar with the formation and drilling results. Must feel pretty good about things with the "announcement" of the JKM consortium. And of course they most likely feel very good about T/B and what they've seen with the seismics. On most of their presentations IOC shows gathering lines that bring the wet gas to the area of EA (See slide 15 of the January 2012 IPAA Presentation). The lines from T/B show a couple of possible routes, but end up at the CSPs at E/A. So my guess is that JKM is also assuming they get T/B. Pet has also mentioned (I believe) that there could be the possibility of CSPs up at T/B depending on what's found there.

As you mention XOM/OSH are scouring for more NG to feed their additional trains. OSH is finding some small pools, but nothing like E/A or T/B. So I would guess for assurance purposes they are very interested in the whole pie; whether it's to feed their existing plant being built or to build in the Gulf to appease Kavo and take any excess to their plant. They also should be very interested in PL 236 as that gas could be fed most easily to their planned LNG plant.

Then we have Shell who would love to have it all also, but how they would develop the fields is anyone's guess, and what they are willing to pay is even more of a guess.

I would think these are the three most interested groups, and it's not to say that even if XOM does not get the whole things that they wouldn't still want to buy some conditioned or wet gas. That could also be a way to keep Shell at bay; have JKM be the SD partner and work out a deal with XOM for feedstock. Would be hard for PNG to force Shell if a deal like this were to be proposed.