I spoke to management today for an update. Our phone connection was terrible as he was not in a good location, so our conversation was much shorter than usual. He stated that everything was moving forward successfully and everyone was working hard.
The 14 Chincontepec wells have been completed. They are done. The full tests have not all been completed but it appears that all will be producers. They may add 1 or 2 more. The likely addition of 1 or 2 more wells leads me to think they had good success.
The drilling on the Upper Jurassic is under way. He said they were at about 2000 metres at this point, with a target depth of about 3700 meters before they start the horizontal leg. They may be able to use the same rig throughout rather than having to change rigs. That decision will be made when they get to depth. If a different rig is required they had indicated before that one already had been lined up.There are a lot of factors that will come in to making that decision. It was too technical for the person I spoke to explain in a short conversation.
Management was very clear on the point that this is an exploratory and test well. While they are expecting good results, and a good result would be in the 600 to 700 BOPD range, the first well and every well is learning about the formation and how to do it better on the next well. The drilling has been slower than initially anticipated and he indicated that the drilling, testing, examining and fracking will likely take them close to the end of September, with results not being known until near the end of October.
Pemex again told ROE to forget a news release. It is a tight hole. ROE had a news release prepared and Pemex said no. Management said that the good news is the fact they are drilling their Prospect One and it is just a matter of time.
On the Chiapas wells he indicated the contracts were in the tendering process. Spud date is somewhere near the end of September. The team is focused on the Upper Jurrasic well. They will be doing three work overs two on Topein and one on Malva and he was not sure when the work overs would start.
As for the migration of the contract he did not have time frame. He said this could be anytime from now to the end of October. This is not something they have any control over.
As for financing, he indicated ROE has enough to do the current work and if anything got delayed it may be some of the Chiapas work. He indicated they would not be doing any more financing until after the results of the Prospect One in the Upper Jurassic was known and not until after the contract migrated. However he qualified that by indicating that there are new developments and changes every day.
I asked Management if ROE and faced any similar problems to the ones encountered by IFR. He said no. He said it was very unfortunate for what happened with them. He said he knows them and could make no comment. He did say, however, that they choose to drill a pinnacle reef and that type of drilling has to be precise and there are risks of hitting nothing. He did say that IFR will likely drill a horizontal one next time. He did state clearly that IFR is much different from ROE in many ways. He said IFR has one small property and ROE has 5 properties, all of which are substantially larger. Also, ROE has not been and will not be drilling pinnacle reefs. He did not elaborate any further.