ARHT Media Inc V.ART.H

News Release wording?

[GreatSwami]

Its an interesting turn of phrase.

"The interval has been logged and preliminary analysis by Niko Resources indicates possible prospective pay of up to 143 meters in the lower Tanjero and upper Shiranish formations."

To understand this terminology we have to make a few assumptions. With the Aalijii reservoir(?) oil shows - up to 29% mud gas was recorded, visible live light oil was recorded from shows at the shaker and mud tanks - and being a sand reservoir there would undoubtably have been matrix porosity and wireline logging analysis can be quite definitive with a petrographic evaluation and estimating "Net Pay" and "Gross Pay" intervals.

With a very low porosity (no to limited matrix porosity) fractured carbonate zone wireline log evaluation is much more nuanced or speculative. They were not expecting much from the Tertiary so they would have had the lightest mud weight practical for drilling that section and so any live gas or oil zones would be easily seen and would have perhaps provided some very good shows at surface - these shows remove any ambiguity of the fluid phases present within the zones involved.

It is highly probably that they have been using very heavy mud densities as they drilled down into the Shiranish - just in case they penetrated gas charged and highly overpressured fracture porosity. Since there is no mention of gas kicks or well control issues - I take it that that negative confirms that whatever they encountered was not the top of a very thick gas or gas condensate column.

In such a case - if they encountered an oil filled column with very heavy mud - they would have been severely overbalanced when they hit the fracture zones - and they have in most liklihood lost considerable volumes of that mud into those fractures. While they would have been thinning their mud as much as possible once they started losing mud - they would eventually have pumped the fractures full of mud, barytes, sized lime additives, gel, polymers, water, sawdust, all kinds of LCM (Lost Circulation  Material) including walnut shells, cellophane etc etc etc. They may even have had to run a few cement plugs or gel diesel plugs to help prevent excessive mud losses. During the time involved between drilling into this zone and getting to the point where they realised they would absolutely have to end drilling operations and run a casing liner so that they can safely drill ahead - considerable volumes of material of all kinds would have been pumped away into the formation.

During these kinds of operations - sample returns to surface can be very poor, intermittant and problematic.  Sometimes there is no return to surface at all as whatever is being pumped and drilled is simply feeding away into the formation and not coming back up the annulus to surface. So mud gas returns can be erratic and sketchy. Samples are greatly contaminated and very hard to interpret and assign to the proper zone. Often much of the drill cuttings are lost in the fractures - pumped away with the mud - and all that is seen at the surface is sloughings off the side of the open hole coming to surface from anywhere above the zone of interest.

This is the reason they ran the 7" liner and of note is that they do record some increasing mud gas and some increasing fluorescense even though returns to surface would have been erratic and intermittant. If there was any gas column of note they would absolutely have had well control issues a la WZR's experience and that would have had to have been noted - the absence of such a news release is quite profound and revealing!

They evidently got the well stable - they plugged off the fracture plumbing with all the drill solids and LCM they pumped down the hole and so then they run wireline open hole logs. Now what these wireline logging tools "see" is simply the reservoir rock and fractures that are stuffed full of mud, water, gel, barytes, limestone mud additives, cellophane, walnut shells, cement whatever? There is absolutely no way they can get any idea of what the fluid phase that originally filled the fractures might have been? Not from the wireline logs anyway. They will also have great difficulty resolving the exact reservoir rock mineralogy and porosity as there are so many complex variables added to the situation during all this lost circulation phase.

Returning to your original comment - whereas the Aalijii zones could be very easily evaluated from both drlling and sample data as well as subsequent wireline open hole data - the lower Tanjero and Shiranish that they have drilled through would be almost impossible to accurately characterise. From drilling evidence (erratic drill rates, rotary torque as the bit gets locked by fracture plane faces, mud losses) it is evident that they have hit significant permeability - and hence porosity. From the erratic sample and mud gas returns they would have got glimpses of fluorescence and elevated mud gas response. They may even have seen some oil spotting in the mud - but this is not noted and so I must not speculate. But in the absence of significant matrix porosity - you do not tend to see any oil in the mud with fracture porosity if you are heavily overbalanced - you flush all the moveable oil away from the well bore as you drill into these zones and see nothing at surface. As I mentioned too - the pumping away of all kinds of garbage into the porosity (fractures) means that interpreting the wireline data is very difficult as all you see is what you placed into the near well bore reservoir plumbing - you do not see what you have driven deep into the bowels of the reservoir!

Niko the operator therefore has no hard facts on which to stand to say unequivocably that they have 143m of "Net light oil Pay." They can only state what they have - and that is that from all the "soft data" sources they know that they have "143m of possible prospective Pay" within the interval drilled and interpreted to be the lower Tanjero and uppermost Shiranish. Due to all the garbage pumped away - these zones may also be challenging to test properly!

But as they drill ahead on the new open hole beneath the 7" casing they will be using much lighter mud densities so they do not have severe circulation losses (they will know what density to use from how the well behaved when they drilled into it with the heavy mud). All the open hole sections uphole will be cemented behind casing - so the first sample returns will be absolutely first class and uncontaminated - they will have very good indications of what they have for oil staining on fracture surfaces and fluorescence. Mud gas responses will be much more diagnostic and revealing. They may even swab in or displace some oil out of the fractures and see some oil shows in the mud at surface.

Hope this explanation helps somewhat - there is a whole lot of inferences going on here - but note that these inferences are conditioned by many many years of seeing these kinds of things happen in daily drilling practise - and there really is very little out there that is truly something "New under the sun!"

GS

PS this is a post of a private inbox reply - but seeing the BB topics I thought it somewhat pertinent so I copy it here for greater consumption.