Their Elk1 and Elk4 well are the best two flowing wells in PNG (and Australia, for that matter). And the liquids count could very well provide a big early bonus.
Here is the PR:
- InterOil Corporation (Toronto:IOL.TO – News) (AMEX:IOC – News) (POMSoX:IOC), a Canadian company with operations in Papua New Guinea advises that acid stimulation at the Elk-4 well has resulted in a significant increase in its test gas flow rate. The well was tested at 86 million standard cubic feet (mmscf) per day, an increase of approximately 36.5%.
- Based on the condensate ratio measured earlier, the well was tested as able to produce at an estimated 18 barrels of condensate per million cubic feet which would equate to 1,540 bbls per day and is consistent with the estimated rate of 18 barrels per mmscf produced during previous testing at the Elk-4.
- “We are exceptionally pleased with these test results obtained from the Antelope structure in the Elk-4 well confirming improved deliverability. The Elk-4 well on test, has recorded the second highest gas flow rate for a well in Papua New Guinea. These latest results are very encouraging as we prepare to drill the Antelope-1 well. Decommissioning at the Elk-4 well site has commenced and the rig will be mobilized to the Antelope-1 well which is targeted for drilling in the 4th quarter of 2008,” said Mr. Phil Mulacek, Chairman and CEO of InterOil.
Something that UCLA professor said came to mind:
- For example, in the last press release, they mention issues with the skin and the testing equipment. It’s all subtle wordsmithing. [Eric Sussman]
- They increased the pipe diameter and tests increased from the 10MMcf/d range to 63.9MMcf/d, just as Raymond James predicted
- They cleaned up the skin and the well increased gas flows another 36.5%. Just as Raymond James predicted
What’s “wordsmithing” about that? Sussman either urgently needs a Geology101 or a lie detector before he writes, as we can detect a lot of “wordsmithing” in his writing, and it ain’t subtle..
Some calculations for fun
John Grant posted the following on the Yahoo board:
- OK – so forget the condensate for a minute and look at the value of the gas itself:
- Natural Gas: mmscf ………………………… 63
- Assume Acid Treatment …………… 140.00%
- Improves flow rate 40%
- New Improved mmscf …………………….. 88
- Est Far East NG pricing ……………….. $6.50 per mcf at wellhead
- Factor for mmscf ……………………….. 1000
- Daily Value of Nat Gas …………… $573,300
- Yearly Value of Nat Gas …… $209,254,500
We could add:
- Congrats, he was very close with his estimate of effect of the the skin clean-up
- InterOil has another well flowing even a little better (100MMcf/d)
- Let’s not forget those liquids, 1500 barrels a day at only one well
- We just showed that even long-term LNG contracts go for $20 per Mcf..