Good comments. Bottom line for this first exploration well is that it was the first step to confirm previous data, theories and assumptions, add more data, modify theories and assumptions and repeat until the reservoir is well understood. All objectives were met and expectations were exceeded and BCGA has been confirmed. Not every bit of news in the first inning is going blow expectations out of the water so nothing out of the ordinary and nothing that should be a concern towards the ultimate goal of moving towards proving up reserves and and resources moving to production. Don’t let your shared slip out of your hands due to less positive news release.
I read an article about how protect against short sellers and that’s to put a sell order on your shares at doubleor triple where the price is now, that makes them unavailable for short selling. Not sure if that is true but makes sence.
Good luck and stay committed.....
The result of Test #4 is about what I expected pre-test for all 4 tests. I expected the first attempt to be a failure. Instead, the well produced a cumulative 2.9 mmcfe/d of gas and condensate.
The flow back from the well was short. Typically, it takes a longer flow back to reach peak production. The size of the fracks were small ( I think ) in order to allow more rapid flow back so that they could establish measurable flows.
The final test was less than the first three. Given that they had more "net pay" in this final test, and all areas are indicated to be gas saturated, the lower production is likely due to the effectiveness of the frac and flow back of this final zone.
In different type rocks, the effectiveness of different frac treatments vary a great deal. In other basins and other BCGA areas, it took time for the companies working in them to determine the most effective way to frac the rock to get good flow volumes. This is the problem I thought Statoil and VLE would run into. I thought it would cause their first well results to be poor.
In test#-4, given the greater amount of net pay that was fracked, and the lower production from the test, this indicates that the characteristics of the rock changed as they move up the well bore such that they need a different frac treatment. There are all kinds of variations that can be used. Such as higher intensity frack, more perforation clusters, more or less proppant, use of more diverters in different ways, slightly different chemistry of the frac fluid ... and etc.
Why do frac treatments vary in performance?
Typically, the displacement or distance from the well bore that the frac can reach is dependent on the volume pumped into a particular fracture. For example, the frac job starts, the company begins pumping frac water or fluid into the well. The pressure increases rapidly until the pressure exceeds the strength of the rock and a fracture begins.
But first, they need to determine the pressure at which the rock with fracture. To determine the pressure, the company essentially pumps frac water into the well watching the pressure rise steadily while keeping the same pumping volume. When the pressure stops rising and drops a few PSI, they have found the breakdown pressure.
When the frac job starts, water with some additives is pumped into the well at high volume until the breakdown pressure is reached - and the fracture begins. As the water flows into the fracture, proppant is mixed with the water such that it also flows into the fractures. To keep the fracture spreading, it requires that sufficient pressure is present at the front of the fracture to keep the fracture spreading. Which means you have pump rapidly enough to keep the fracture spreading and of course, to overcome turbulence and frictional effects as well as the dispersion of the frac fluid into rock pores which attenuates the frac.
Generally, there are a number of perforations through which the frac pressure and water is exposed to the formation. If all things are working correctly, the pressure needed to start the fracture spreading is similar for each layer of rock that it is perforated and which is fracked. Often, some fractures begin spreading faster at some perforations than others. Diverters (frac balls) may be dropped to divert frac fluid from perforations getting high volumes of frac fluid and sand to lower volume areas.
In deep wells such as this one, the type of rock that is in various layers around the zones fracked have a great deal to do with how the frac propagates. Basically, the fractures are oriented vertically and may spread until they reach a layer of rock to elastic or tough to fracture. Thus, confining the frac below and above such layers. Additionally, the fractures spread easily through already fractured rock - reactivating old fractures that may have slightly "healed" as they are the weaker part of the rock.
In any case, the above is meant to educate the reader simply that frac treatments are not simple. Sometimes it takes more than one well and frac treatment monitored with microseismic in order to determine what is happening and how to modify the treatment appropriately to get the best results. That said, an initial flow of 0.4 mmcfg/d from this zone is not bad.
UPL's vertical wells produce from 16 different intervals and get an average 30 day IP of 3.8 mmcfg/d (for a per well EUR of 4 bcf). It took some testing and optimization to get to this average production value.
Statoil and VLE tested two intervals/frac stages in each test for a total of 8 intervals. UPL for 2 intervals is getting 0.475 mmcfg/d in their 30 day IP and for all 16 ( 8 sets of 2), UPL get's 3.8 mmcfg/d.
In the Yamalik-1, they did 8 frac stages and 4 tests which covered about half the gas saturated formation. The fracs were small and not optimized based on experience of fracing similar deep wells in this basin. Yet, they get a combined 2.9 mmcfge/d. And I don't think the flow back has reached the point where they are at their maximum flow. My guess is that the flow continues to increase for at least a couple more weeks as the frac water is produced and then starts declining. Given the difference in frac stages, between what UPL does and what Statoil and VLE are doing, and the amount of rock fracked, and the lack of optimization, the Yamalik-#1 is an excellent start.