MAXIM BULLET POINTS:
MAXIM AND OPERATING PARTNER HIT DISCOVERY OIL WELL ER-98 IN NOV 2006 WHICH. IT WAS LARGEST ON SHORE OIL FIND IN TRINIDAD IN OVER 30 YEARS.
The flow rates from ER-98 are as follows.
Zone 1: the lower forest A sand
At 3,100 feet: 80 feet of net pay 12/64 choke, 620 PSI (flowing tubing head pressure -- FTHP) and 320 barrels of oil per day.
Zone 2: the lower forest B sand
At 3,200 feet: 100 feet of net pay 12/64 choke, 500 PSI (FTHP) and 282 bopd.
Zone 3: the middle cruse sand
At 5,000 feet: 30 feet of net pay one-quarter choke, 420 PSI (FTHP) and 120 bopd.
Total flow rate of the wells is 722 bopd.
MAXIM RECENTLY RECEIVED PERMITS TO DRILL ANOTHER 47 WELLS IN THE FIELD- DRILLING TO START IMMINENTLY
MAXIM’s FIELD IS DIRECTLY WEST AND ADJACENT TO TO FIELD OPERATED BY BP AND TEXACO THAT HAS PRODUCED 200 MILLION BARRELS OF OIL
THE SAME SAND HORIZONS THAT ARE THE PRODUCING HORIZON IN THE 200 MIL BBL FIELD EXTEND ACROSS THE MAXIM JV LEASES
OPERATORS HAVE LOGGED OFF 12 MIL BBLS IN THE JV DISCOVERY BLOCK (2.5 MIL BBLs RECOVERABLE AT 18%)
MAXIM CONSULTING GEO EXPECTS SEE A WATERDRIVE IN THE FIELD (AS SEEN IN 200 MIL BBL FIELD) TAKING RECOVERY FROM 18% TO 40% PLUS
NEXT 4 WELLS ARE CONSIDERED DEVELOPMENT AND SHOULD FLOW AT MORE THAN 200 BBL/D EACH. UP TO TEN WELLS CAN BE DRILLED ON DISCOVERY BLOCK
DIRECTIONAL HOLES WILL ONLY BE METRES APART ON SURFACE, LEAVING ENVIRONMENTALLY PREFERRED NOMINAL FOOTPRINT
DEVELOPMENTAL DRILL PROGRAM WILL BE FOLLOWED BY DRILLING ON FAVOURABLE TARGETS ON THE EXPLORATORY BLOCK FAULTS
DEPUTY ENERGY MINISTER IS BIG BELIEVER IN THE ASSET
CONSULTING GEOLOGIST ALREADY OWNS LARGE POSITION IN MXM AND IS TAKING MORE ON THIS PP
OTHER CORE ASSET OF MAXIM’S IS GULF OF MEXICO GAS WELL NOW CASH FLOWING $250K PER MONTH TO MXM
MXM HAS ABOUT $15 MIL PLUS IN PREVIOUS YEAR’S TAX LOSSES TO OFFSET THE INCREMENTAL INCOME
Photo at free flowing ER-98 Discovery well:
The next several wells will be directional and drilled from the asphalt pad we are standing on. Dave Lutchman is the consulting geologist that has been working in Trinidad oil and gas for over 25 years and he states there is a very high probability of success on the next 4 wells and in fact feels that the discovery block could produce from as many as 10 wells. Essentially, the sands (Forest and Cruse) that are the oil horizon on Maxim’s blocks are the same sands that are the production horizon in the field immediately adjacent to the east, which has been operated by Texaco and BP, has produced 200 million Bbls to date, and is still producing. All current production forecasts are based on solution gas drive and recovery of only 18% OOIP. At this point, the operators have logged off approximately 12 million barrels of oil, which at 18% recovery is 2,160,000 Bbls of recoverable oil - Maxim has a 41% interest in that (and an opportunity to increase equity significantly). Geologist Lutchman also says there is a likelihood that the operators will encounter a water drive in the field which would more than double recovery rates; the 200 million barrel Erin Field to the east has a water drive and they are typically recovering at 40% plus of OOIP.