From $17+ to $12+When OIL was at $17
-general markets were no where near as bad as it is today.
-oil companies, especially international, were not getting hammered as today. Tied into point #1.
-oil was trading at $70-75/bo.
-Brenda was online at averaging 21,500 bod (Q3 numbers).
-Brenda/Nicol pumps were not operational, leading to point #4.
-Huntington only had 1 vertical well into the Paleocene and Jurassic zones (combined 11,000 boed from about 150ft of pay, 39-41 API). The well was drilled into the flank of both structures.
Estimates of up to 28 square km for the Paleocene and 27 square km for the Jurassic. Jurassic had 2x the payzone with no O/W contact found.
-Shelley phase 1 drilling done (3,082 bod from 18 ft pay – 31 API).
-Shelley phase 2 drilling underway.
-2 wells drilled into Black Horse (combined over 11,831 bod, 67ft and 80 ft pay – 38 API).
-1 well drilled into Bugle (9,000 boed, 83% oil from 200+ feet of pay, 44 API). No O/W contact found.
-In 2005 Nexen had presentations that stated at $50 oil, a 10 mmbo deposit is economical within a 20 km radius to tie into their Scott platform. Black Horse and Bugle are about 8 km and 20 km away from the platform and oil is no where near $50/bo. Tying in both together increases the economics as it is the same as saying the combined reserves of both deposits 20 km to the Scott platform.
-1 discovery well in Kildare Ettrick sands (2,675 bod – 35 API). Appraisal in the Ettrick sand and found a 30m of net pay in the Tweedsmuir sands. The Ettrick was not flow tested in the 2nd well. It was logged and confirmed to be a 2 km extension to the original Ettrick zone in the discovery well. The Tweedsmiur tested at 4,730 boed, 89% oil – 41 API)
OIL now at $12-13
-general markets, especially the DOW, is a nightmare today.
-all oil companies have gotten hammered over the last 3 months. Tied into point #1.
-oil trading at $90+/bo, instead of OIL’s Q3 average of $74/bo.
-markets expected 30k/d, but Dec NR stated still at 18-20k/d under natural flow. This is what killed the SP more than anything. The SP lost 1/3 of its value from the $17.92 high. It is direct relation to the production output of 1/3 less than what was expected.
-pumps are now online and working and production is increasing, but has not stabilized yet.
-80% of Balmoral facility and field is now OIL’s, including 1,800 bod of added production.
-operation costs at Brenda are expected to fall from the $12/bo in Q3 to as low as $5/bo, by getting Balmoral. Up to another $7/bo to the bottom line.
-The aerial extent at the Huntington Paleocene is now about 70% drilled, from Noreco presentations (combined 7,940 boed, 92% oil, 95ft of pay, 44 API).
-Currently drilling the Huntington Jurassic.
-Currently have a liner placed in Mallory. Estimated pre-drill size is potentially as large as the Huntington Jurassic target, but a 27.24% WI to Huntington’s 40%WI.
-Shelley phase 2 drilling did not extend the 7 square km aerial extent of the field, but it did prove another 14 ft of oil pay over the O/W contact. Shelley to be developed with initial rates expected to be 15k/d.
-Currently drilling Bugle appraisal/production well. Well is a re-entry into the discovery wellbore and will drill deeper to find the O/W contact.
-OIL’s PR department has told me that a second appraisal well at Kildare is expected in the 2nd half of 2008, unless Nexen can get a drill sooner.
-The next well at Black Horse is to be an appraisal/production well.
-2 more development wells to be drilled at Brenda, 2 at Balmoral and 1 at Nicol.
-The Balmoral, Bladon and Blenheim fields are to be redeveloped and tied into the Balmoral facility.
-Burghley is to be tied into Balmoral in 2009 at 10k/d at 4 pounds sterling/bo.
Fundamentally nothing has really changed other than the oil price is up, Shelley and at least the Huntington Paleocene zone are going to be developed and production is rising to a number that looks closer to where it was expected to be months ago. The main thing right now is the thing that is holding everything back and that’s the general US markets. They are dragging down everything with it. The oil price has fallen almost $10 in 2 weeks, when crude inventories are down 10 million in that time. In the markets perception means everything. And right now its downright ugly for the US economy.