Next Antelope Well

[petrengr1]

http://www.sec.gov/Archives/edgar/data/1...98_ex1.htm

It looks like the next Antelope well will be drilled down dip southeast of Antelope-2. See maps at the bottom of the report submitted to the SEC.

It appears that the proposed well will find the top of the carbonate reservoir at about -1,900 meters sub sea. If that is accurate the well will have a gas column of about 328 meters (1,076 feet). I will be about 215 meters (705 feet) down dip from Antelope-2.

[Stavros]

Is that where you would drill Pet if you were making the decision?

If NO, what would you have selected for a location and why?

[petrengr1]

I would probably have drilled between Antelope-2 and Antelope-3 on top of the structure to get another huge gas column- maybe 2,100 feet or so. That is where IOC had previously placed Antelope-4. They are probably trying to prove the limits of the reservoir. The first well is to be drilled as shown on the Map in Annex 2 http://www.sec.gov/Archives/edgar/data/1...98_ex1.htm and Total is to also pick the location for the second well as per clause 8.3 b. I believe IOC is going to be in charge of the drilling both for exploration and appraisal while Total will be the operator and be in charge of the building and development of the pipelines, CSP and LNG Plant. So IOC will be in charge of the drilling both in PRL 15 and their other licenses. This will probably be true even if Total exercises their option to Farm-in to the other licenses PPL 236, 237 and 238. I am not sure how PRE will fit into the picture in PPL 237, for example who will be drilling Raptor-1? IOC or PRE?

[admin]

["I would probably have drilled between Antelope-2 and Antelope-3 on top of the structure to get another huge gas column- maybe 2,100 feet or so."]

Pet, isn't a delineation well more useful in terms of proving the extension of the field?

[petrengr1]

["I would probably have drilled between Antelope-2 and Antelope-3 on top of the structure to get another huge gas column- maybe 2,100 feet or so."] Pet, isn't a delineation well more useful in terms of proving the extension of the field?

Yes, I suppose that is the main purpose. They will just want additional confirmation that the seismic picture is accuate, the presence of the high porosity limestone and  dolomite is as expected etc. The largest extension of the field that has not been drilled lies to the Southeast where they have spotted the next well.

You can see what GLJ thought this looked like by looking at http://www.interoil.com/iocfiles/documen..._FINAL.PDF pages 50 and 51 and IOC's interpretation on page 52. It looks like the proposed location may be about 100 meters higher on the IOC interpretation than on the GLJ interpretation.

These maps remind us that Mule Deer is "lurking" to the west of Elk/Antelope. Part of Mule Deer lies in PRL 15 but what is NOT shown on these maps is that the major part of Mule Deer lies outside of PRL 15 in PRL 237.

[admin]

["These maps remind us that Mule Deer is "lurking" to the west of Elk/Antelope. Part of Mule Deer lies in PRL 15 but what is NOT shown on these maps is that the major part of Mule Deer lies outside of PRL 15 in PRL 237."]

Mule Deer is already a discovery if I remember correctly (gas was ascribed to it in an earlier GLJ report but I don't actually remember a Mule Deer well), so under what 'regime' (payment structure) will the gas fall, that of E/A or a new PRL 15 discovery? Will it be divided between licenses commensurate, or if the majority falls within one license, that one provides the legal underpinning (in which case neither of the above payment regimes apply)? Thanks.

[Palm]

My guess is that unless the gov has declared it as a "location" it won't be considered. Plus the /mcf schedule only applies to EA in PRL15. Somewhere recently somebody said that there is some thought that some of these prospects which are part of PRL15 could actually be connected to or part of EA; similar to Elk 4 which ended up being in the Ant structure. Not sure of the possibility of this, but should that end up being the case is it possible any of this would actually end up being included in the EA increasing /mcf calculation?

[Palm]

I believe the answer to my question above is "Yes". The escalating payment amounts apply to the "Antelope field" per the PRL15 sales agreement referenced above. Here is the definition of the Antelope field from the Agreement:

"Antelope Field

The Antelope field is the petroleum bearing limestones intersected in the Antelope-1, Antelope-2 and Antelope-3 and Elk 4 wells. The top of the reservoirs section and petroleum water contact is listed in Table 1 and the typical log response is shown on the Antelope 1, 2 and Elk 4 logs in figure 3.

Any petroleum encountered in future wells on the Antelope Field or its lateral components that is in Pressure Communication with petroleum in the Antelope-1, Antelope-2, Antelope-3 or Elk-4 wells will also be considered part of the Antelope Field. Any petroleum encountered outside the Antelope Field but in Pressure Communication with wells that are part of the Antelope Field will also be considered part of the Antelope Field.

Pressure Communication means with respect to any accumulation of petroleum, that:

(a) such an accumulation has petroleum bearing sediments which are in direct and continuous petroleum contact with the Elk Field or Antelope Field as necessary;

(b) such an accumulation belongs to the same petroleum pressure regime as the Elk Field or Antelope Field with which it is in such direct and continuous petroleum contact; and

© the composition of the petroleum of such accumulation is consistent with the composition of the petroleum of the Elk Field or Antelope Field, as applicable, with which it is in such direct and continuous petroleum contact."

Question is do you, Pet, or anyone else think it's possible. I would say yes or they wouldn't have it in the agreement.

[ArtM72]

Never saw an elephant with antlers, but that would certainly be a welcome new specie to see around Christmas next year. Beats the heck out of the Grinch that showed up this year.

[petrengr1]

I think it is possibe that the Mule Deer Field may be in pressure communication with the Elk or Antelope Field(s). As you can see on the GLJ Maps http://www.interoil.com/iocfiles/documen..._FINAL.PDF page 52, they show Mule Deer is at about the same depth and they put the Mule Deer gas/water contact the same as Elk. So drilling in Mule Deer could possibly add to the Elk/Antelope reserves for PRL 15 if it is in pressure communication with Elk or Antelope.

Mule Deer has not had a well drilled yet and is therefore not yet declared as a discovery.

If any of these PRL 15 prospects extend across the boundary of PRL15 into PPL 237 a unit will have to be formed between the partners of the two different licenses. I do not know how the Government would handle the Licensing, perhaps a separate PRL. If the partners were the same they could just expand PRL 15. So far we know that Mule Deer and Raptor/Duckbill appear in both licenses, PRL 15 and PPL 237.