The following was extractedfrom a British blog site (Investorxxx)that can't be named on Stockhouse apparently asit comes up "profanity used".
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by islapetroleroSome thoughts
Incomparison of the IAE corporate presentation and the press release thefollowing technical observations can be made:
Presentation statesTarget depth of spill point is 10,000 ft(true vertical depth isinferred), well trajectory shown as deviated not vertical.
Pressreleased Drill depth of 10863 ft measured depth,would be expected forthe deviated length of well bore (i.e 8%) plus sufficient hole to TD toconfirm base of reservoir, and <well bottom> for logging toolsi.e. Reservoir confirmed o depth.
The Well with successfullylogged and RFT'd hydrocarbons at this depth, infers structure is filledto spill and that the a 650ft upside column exists
The 22 ftgross reservoir sand (encountered) appears to be the same thickness asthat proven at the top of the structure by several wells -consistentreservoir distribution.
What we do not know is the hydrocarbonwater contact level, if encountered at all, however, a DSTis underexecution, thus a sufficient hydrocarbon leg is justified - i.e mostlikely hydrocarbon down to exists.
Company Following normalprocedure to mob DST equipment and plan designed to be consistent withfluids sampled, and following normal business to conduct test tovalidate booking of reserves and reservoir quality.
Again,justsome observations based on normal oil field practice.
Hope thishelps
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Seems like this well is an indicatedsuccess - not sure why the market is selling off - what they haveannounced is
exactly what one would hope for at thisstage in the game. Looking at the presentation, they model a steeplydipping reservoir. In my layman's terms, the "650' column" isn't theexpected vertical thickness of the reservoir, but rather the width as itis on an angle. I think the selling response is simply poorunderstanding of the 22' vs the much talked about 650' "column".
Whileonly time will tell (12 days) via the DST if this is hydrocarbon vswater (or some combination thereof), it sure seems to indicate thatStella is a success of some sort and that reserves will see a boost...
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Current2P reserves exists within the top 250 ft column, the appraisal wellaims to prove an additional 650 ft column making the total column900 ft.The existing 2P reserves are economic by definition.
Posttest, reserves will be upgraded to include the volume within the flanksas proven with this new control data point, and therefore the2Preserves can be nothing but higher and add significant value tothe project.
Of the well objectives they must have confirmedtwo,fluid extent, type, and with a test will confirmreservoir<deliverable>(given that that this is the deepestpenetration of the reservoir). All data inputs to the Field developmentplan and discussions for commercial off-take (improves terms). Allowsfor better project finance terms also.
The informationregarding this well already can be inferred to have a significantpositive impact on reserve distribution
Again, normal processfor North Sea projects.
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I wasn't as articulateas I would have liked. Go look at the presentation - they show adiagram of what they seem to have encountered.
Iffully charged, it indicates that reserves may double. Net 2P is 7MMright now - implies another 7MMbbls.net is possible. Slap $15 b.o.e.for a condensate rich gas and that's$105MM in added value. Not bad for awell with net cost of around $15MMand already in the developmentcycle...
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All in all, everyoneneeds to wait for the definitive test results in a couple of weeks forthe really significant news but today's news release IS POSITIVE!