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Today's AGM Presentation
#1

OK, let me see if I can put a “happy face” on this. The good news is none of the three exploration wells have reached the “target” zone so they all still have the same potential as they did when the wells were started. They are all still drilling “toward” the casing point above the target zone. We must be very careful until we get to that casing point and get the casing set and cemented in place and the dual down hole deployment valves installed.

The most troubling statement is about Wahoo-1. Dr. Hession said:  “AT Wahoo, there are significant operational challenges in safely progressing through a highly pressured Orubadi seal.
If we are successful in controlling the high pressure, we will continue drilling towards our target zone.
However, this is proving to be very challenging.
Any forward planning or further drilling from here, and I said this before and I’ll say it again, must consider safety as the number one priority."

The question here seems to be “will we be able to drill the well to the target zone?”  They are apparently drilling through an over pressured Orubadi shale zone. Sometimes these over pressured shales have retained excessive water from deposition. This water causes the shales to be more subject to a kind of plastic flow, kind of like “play dough”. So you have to get the mud weight and mud characteristics just right to keep the shale from flowing into the hole and sticking the pipe and/or closing the hole. The other problem to worry about is that there can be layers of sandstone within the over pressured  shale zone which could contain gas or oil. The over pressured shale zones would not cause a blow out but these sandstone layers, which would also be over pressured, could be a source of concern about  the potential for a blowout. The problem to be overcome is to get a hole drilled through this sticky shale and/or sandstone layers down to the top of the carbonate zone and keep the hole open long enough to get casing set and cemented at the top of the carbonate pay zone.

Other interesting points in the presentation may be found at http://tinyurl.com/p3fbxyr page 20. Note that the limestone zone of the Antelope Field has been thrust up over the top of the limestone zone of the Antelope Deep prospect for what appears to be a considerable distance although there is no scale on the map. The point being that the two fields are separated by a thrust fault and the Antelope Deep prospect will be considerably deeper than the Antelope Field and will be below (lower than) the Antelope Field gas/water contact. This means there will be no pressure communication between the two fields if the Antelope Deep prospect does indeed contain gas. Also note that the high point of the Antelope Deep prospect is below a low point of the Antelope Field.

This next point is very significant unless it is a mistake, so I need your help on achieving a proper understanding of what it means. We (or at least I) have always had the understanding that the certification process to determine how much gas Total would pay IOC for related to the Antelope Field. So I found it very curious that page 12 of the presentation says:  “InterOil has the option to call a 2nd certification of PRL15 even after production has begun. This ensures that InterOil is compensated for any additional
gas that is found.” As you know PRL15 contains part of Mule Deer, Antelope Deep, White Tail, Deer, Raptor and Duck Bill. So, am I getting senile or am I just now beginning to see what Dr. Hession means when he says “up side”? Ten years from now we may call for the 2nd certification and be paid for all the gas that has been discovered in PRL15?

How about some of you experts telling us what this means.

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#2
Thanks Pet. Still all to play for, that is, drill for, then, even if conditions are very challenging. But it's too early to draw any firm conclusions.

Pretty significant difference between E/A and PRL15 you noticed. Could be just a typo though, my assumption is that the 2nd resource evaluation and possible Total payments is just related to E/A, at least that's what I got from all previous communications about this.
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#3
I wonder if, given Mule Deer is to the west, this statement from Hession's posted remarks has a bearing:

"At Antelope-5, we will test the extent of the high-quality reservoir to the west and check the
controlling fault of the entire Antelope structure. We don’t know right now exactly where this controlling fault is, but if it is farther away, it will mean the Antelope field is a lot bigger."
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#4
I'm pretty sure Mule Deer is significantly north of Antelope 5, next to and to the west of Elk much more than Antelope.
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#5
Pet, I guess it's good that they have the more powerful Rig 3 at Wahoo rather than Rig 2, right?
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#6

'petrengr1' pid='45480' datel Wrote:

OK, let me see if I can put a “happy face” on this. The good news is none of the three exploration wells have reached the “target” zone so they all still have the same potential as they did when the wells were started. They are all still drilling “toward” the casing point above the target zone. We must be very careful until we get to that casing point and get the casing set and cemented in place and the dual down hole deployment valves installed.

The most troubling statement is about Wahoo-1. Dr. Hession said:  “AT Wahoo, there are significant operational challenges in safely progressing through a highly pressured Orubadi seal.
If we are successful in controlling the high pressure, we will continue drilling towards our target zone.
However, this is proving to be very challenging.
Any forward planning or further drilling from here, and I said this before and I’ll say it again, must consider safety as the number one priority."

The question here seems to be “will we be able to drill the well to the target zone?”  They are apparently drilling through an over pressured Orubadi shale zone. Sometimes these over pressured shales have retained excessive water from deposition. This water causes the shales to be more subject to a kind of plastic flow, kind of like “play dough”. So you have to get the mud weight and mud characteristics just right to keep the shale from flowing into the hole and sticking the pipe and/or closing the hole. The other problem to worry about is that there can be layers of sandstone within the over pressured  shale zone which could contain gas or oil. The over pressured shale zones would not cause a blow out but these sandstone layers, which would also be over pressured, could be a source of concern about  the potential for a blowout. The problem to be overcome is to get a hole drilled through this sticky shale and/or sandstone layers down to the top of the carbonate zone and keep the hole open long enough to get casing set and cemented at the top of the carbonate pay zone.

Other interesting points in the presentation may be found at http://tinyurl.com/p3fbxyr page 20. Note that the limestone zone of the Antelope Field has been thrust up over the top of the limestone zone of the Antelope Deep prospect for what appears to be a considerable distance although there is no scale on the map. The point being that the two fields are separated by a thrust fault and the Antelope Deep prospect will be considerably deeper than the Antelope Field and will be below (lower than) the Antelope Field gas/water contact. This means there will be no pressure communication between the two fields if the Antelope Deep prospect does indeed contain gas. Also note that the high point of the Antelope Deep prospect is below a low point of the Antelope Field.

This next point is very significant unless it is a mistake, so I need your help on achieving a proper understanding of what it means. We (or at least I) have always had the understanding that the certification process to determine how much gas Total would pay IOC for related to the Antelope Field. So I found it very curious that page 12 of the presentation says:  “InterOil has the option to call a 2nd certification of PRL15 even after production has begun. This ensures that InterOil is compensated for any additional
gas that is found.” As you know PRL15 contains part of Mule Deer, Antelope Deep, White Tail, Deer, Raptor and Duck Bill. So, am I getting senile or am I just now beginning to see what Dr. Hession means when he says “up side”? Ten years from now we may call for the 2nd certification and be paid for all the gas that has been discovered in PRL15?

How about some of you experts telling us what this means.

Pet,

Given my expeience with management speak Wahoo is a failure unless his team pulls a rabit out of the hat.

Reply

#7

'Putncalls' pid='45495' dateline='<a href="tel:1403632 Wrote:

'petrengr1' pid='45480' dateline='<a href="tel:1403624 Wrote:

OK, let me see if I can put a “happy face” on this. The good news is none of the three exploration wells have reached the “target” zone so they all still have the same potential as they did when the wells were started. They are all still drilling “toward” the casing point above the target zone. We must be very careful until we get to that casing point and get the casing set and cemented in place and the dual down hole deployment valves installed.

The most troubling statement is about Wahoo-1. Dr. Hession said:  “AT Wahoo, there are significant operational challenges in safely progressing through a highly pressured Orubadi seal.
If we are successful in controlling the high pressure, we will continue drilling towards our target zone.
However, this is proving to be very challenging.
Any forward planning or further drilling from here, and I said this before and I’ll say it again, must consider safety as the number one priority."

The question here seems to be “will we be able to drill the well to the target zone?”  They are apparently drilling through an over pressured Orubadi shale zone. Sometimes these over pressured shales have retained excessive water from deposition. This water causes the shales to be more subject to a kind of plastic flow, kind of like “play dough”. So you have to get the mud weight and mud characteristics just right to keep the shale from flowing into the hole and sticking the pipe and/or closing the hole. The other problem to worry about is that there can be layers of sandstone within the over pressured  shale zone which could contain gas or oil. The over pressured shale zones would not cause a blow out but these sandstone layers, which would also be over pressured, could be a source of concern about  the potential for a blowout. The problem to be overcome is to get a hole drilled through this sticky shale and/or sandstone layers down to the top of the carbonate zone and keep the hole open long enough to get casing set and cemented at the top of the carbonate pay zone.

Other interesting points in the presentation may be found at http://tinyurl.com/p3fbxyr page 20. Note that the limestone zone of the Antelope Field has been thrust up over the top of the limestone zone of the Antelope Deep prospect for what appears to be a considerable distance although there is no scale on the map. The point being that the two fields are separated by a thrust fault and the Antelope Deep prospect will be considerably deeper than the Antelope Field and will be below (lower than) the Antelope Field gas/water contact. This means there will be no pressure communication between the two fields if the Antelope Deep prospect does indeed contain gas. Also note that the high point of the Antelope Deep prospect is below a low point of the Antelope Field.

This next point is very significant unless it is a mistake, so I need your help on achieving a proper understanding of what it means. We (or at least I) have always had the understanding that the certification process to determine how much gas Total would pay IOC for related to the Antelope Field. So I found it very curious that page 12 of the presentation says:  “InterOil has the option to call a 2nd certification of PRL15 even after production has begun. This ensures that InterOil is compensated for any additional
gas that is found.” As you know PRL15 contains part of Mule Deer, Antelope Deep, White Tail, Deer, Raptor and Duck Bill. So, am I getting senile or am I just now beginning to see what Dr. Hession means when he says “up side”? Ten years from now we may call for the 2nd certification and be paid for all the gas that has been discovered in PRL15?

How about some of you experts telling us what this means.

Pet,

Given my expeience with management speak Wahoo is a failure unless his team pulls a rabit out of the hat.

your assessment is exactly how I see it.  They may have to TA and come back later with a better plan and better technology.

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#8
The point I don't get Pet is this: IOC knew that the "HC cap" was difficult to drill in the past. Would they not prepare for this? Is RIG 3 using a new crew?
Is Hession a "wimp"?
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#9
Wahoo IS a failure? There you go again, kaliboo. Make up your mind! Last comments before this: "minor setback", "they will figure it out", reaction "overblown", "just another day at the office"!!! Obviously, you don't know what the hell to make of it, and everyone just needs to ignore you and pay attention to Pet.
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#10

'Getitrt2' pid='45515' datel Wrote:Wahoo IS a failure? There you go again, kaliboo. Make up your mind! Last comments before this: "minor setback", "they will figure it out", reaction "overblown", "just another day at the office"!!! Obviously, you don't know what the hell to make of it, and everyone just needs to ignore you and pay attention to Pet.

Is this not a good excuse clause?

"Any forward planning or further drilling from here"

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