MGM Energy Corp MGMCF

RE: RE: RE: News Release - good news

[OilEng]

It would be wonderful if the testing could determine if the play is commercial; however, no short duration test on a vertical well is going to do that in shale oil.  You need horizontal well with testing periods of many months to establish type curves.  This is why Husky is putting in the all-weather road.   They are planning on drilling horizontal wells and testing them for months on end irrespective of the season. 

The Canol wells are vertical wells which were fracked three times with  20 tonnes of sand each.  A typical horizontal well would have 20 to 30 fractures with a total of 2,000 to 3,000 tonnes of sand.   So this is about 2% of the size of a horizontal fracture.  The purpose of this mini frac is to confirming that MGM is in the light oil window.  They have done this.  They could have been in the immature part which would mean heavy oil or the overmature part which would mean gas or wet gas.  This was a huge risk which has been eliminated.

Husky will be the first to establish if the play is commercial.  If Husky is commercial then MGM is golden because they have much more oil per section.  I have looked at the logs of an old well on one of the Husky Blocks.  It has about 78 million barrels per section while MGM has about 110 million barrels per section in Block 466B.  The news release indicates that well just drilled has the same amount of reservoir as the I-77 well for which I have logs.  As the table below shows the reservoir quality in I-77 looks as good or better than Husky's well.  (Better quality reservoirs have higher porosity and lower water saturations)

 

	EL466B - MGM	Husky
	I-77	K-03
Porosity	13.9%	10.6%
Water Saturation	20.9%	26.4%
Net Pay -feet	195	200
OOIP million BBL/section	106	77