Deeper Dive into "Well This is a Surprise!"Lurk & Learns:
Maybe the key aspects of the NR (as highlighted and with explanatory comments by Stanley) should be revisited:
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"The first of potentially five production tests of the Royston-1X well evaluated the lowest and least prospective section in the subthrust sheet <aka EXPLORATION> of the Herrera formation at depths between 11,102 and 11,168 feet. During testing, the well did not flow oil to surface <aka requires expensive PUMPING>. Swabbed volumes were analyzed by a third party confirming 40-degree American Petroleum Institute gravity formation crude oil, representing the deepest oil encountered on the Ortoire block to date. This section of the formation appears to be a low permeability reservoir <aka poor structural connectivity/conditions for oil pooling optimization> and further testing will not be conducted.
<aka DEVELOPMENT wrt Zones 3, 4 & 5 OPTIMIZATION>
Touchstone will continue testing operations with potentially four additional tests targeting an aggregate 384 gross feet, with a program to evaluate each identified sand interval independently. The next well test will target a gross interval of 70 feet in the middle portion of the subthrust sheet and will be performed with a service rig. Testing operations at this interval will commence once the drilling rig is moved to the Cascadura C location, which the company anticipates occurring in late May when civil operations at the Cascadura C location are scheduled to complete."
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Lurk & Learns:
In O & G as in any other phases natural resource activity (Google for chart) we have exploration, development & production. In the Royston 1X the the Star Valley(SV) rig was used to optimize the chances to EXPLORE the beyond the limist of the already explored (3, 4 & 5) for any POTENTIAL for hydrocatrbons (oil) in the lowest TD (total depth) attainable. Meaning i(aka a reminder that in the exploration phase there are NO gurantees of finding anything with attendant/potential of commercial viability.
In this case, the main take away (IMHO) is the proof of the SV's capability to SAFELY drill to and at the same time EXPLORE to these depths. with far reaching (possible) regional implications wrt Kraken's and up to and including proposed contiguous acquisition planning only limited by the Clover Hill Fault and environmental no go zone(s) Mayaro Beach Resort & the Nariva Swamp.
In this case, drilling an EXPLORATION hole (into Zones 1 & 2) about TWO MILES deep into the targeted structure to establish the stratigraphic and petrological rock properties is a monumentous achievement as this testing of the potential beyond Zones 3 , 4 & 5) did not come with any pre suppositions suggesting "PROMISE".
Meaning even after the achievement of getting to the deepest TD in the Ortoire Block, the opportunity to evaluate the host rock (e.g. the porosity and permability) are key to the the establishment of potential for hydrocarbons formation/generation as a result of the depth of burial (resultant of the weight of the overlying strata - aka hydro lithostatic forces).
The ideal/optimum being the rock (aka sand) being loose/interconnected & capped/contained and pressurized enough to transfer to valve control "Christmas Tree" to the surface.
While Proselenes (ESL??) might have used the descriptor (exploratory Zones 1 & 2 would have been a) "bonus"; maybe "gravy" in addition to the already proven/previously drilled Zones 3, 4 & 5 might be more appropo to explain the HIGH RISK associated the HIGH REWARD (IMHO) knowledge obtained.
Zones, (aka the petro geo stratiagraphic column wrt 3, 4 & 5 ) already "PROVEN" (Google the terms "Inferred, Indicated & Proven") will be OPTIMIZED. Meaning testing will select the zones with the highest PROBABILITY of (free flow oil) because; unless you're familiar with the economic vagaries of (say) 12 stage submersible oil lift pumps at these depths re Zones 1 & 2) in an underpressured "vessel" .... Touchstone may be too high risk for the impatient.
The only VIABLE option for the impatient being to sit on the sidelines until Casadura gas is closing in on connection to the NGC grid or TXP announcing positive EPS (as a result of Cascadura gas). See also the now dividend paying Alvepetro (ALV) the Brazilian gas play also featuring some familiar board names ~ about two( 2) years ahead (development & production stage wise) of TXP.
High value targets change a the drop of a hat, meaning Cascadura "C" will accrue to the TXP bottom line faster than if Phase 1 & 2 was free flowing to surface".
BWDIK? The astute who fully COMPREHEND the excellent breakdown as (kudos) detailed by Proselenes and are fully prepared to assume ownership from the "weak hands" (shareholders) not fully comfortable (understanding) with the day to day stock price gyrations versus the future expectation/rpomise.
GLTAL GLAP Caveat Emptor (Latin for buyer beware/ SUPA)
Cheers
Stanley