Rework Questions

January 2017

Why does Hal think this will work?  If it doesn't what is likely next step and cost?

​There is another potential zone above this one.  You always work from the bottom up.  If this does not work, there                       are several options: 

                  1.  We plug the well and walk away…that too costs money

                  2.  We attempt to complete the upper zone

                  3.  We’ve discussed sidetracking the well (please go to the website for a diagram of this) 

I do not have costs on any of these options at this time…I’m thinking sidetracking will be the most expensive.  We                     attempted completion last spring in a lower zone and you could see the gas, it just would not kick off.

 

Do you ever get a second geologist to validate?

Hal does a great deal of research in the Log Library.  It is a library filled with geological information.  While we do not “pay” for second opinions, Hal does collaborate with other geologists there.

 

What is potential of this well versus #2?

The truth is we don’t know.  It did have a high resistivity, which is inductive of a productive zone.  There were no core samples taken when the well was drilled.  This zone did have a good. We expect it to be dry gas, and it should be a good little producer.  That’s why we haven’t given up on it.   Today natural gas is trading at $3.28 a Mcf.  That is a good price and it has only been getting better and better

 

Did new separator achieve goal of reducing water on #2? If not is the water still costing us money? Is there a next step?

The purpose of the compressor was not to reduce the water down-hole, but to eliminate it from the line so we could move the gas through the sales line.  We did achieve that goal.  We are still hauling a large volume of water.  We are investigating the cost of squeezing job (https://en.wikipedia.org/wiki/Squeeze_job) and the cost of a disposal well.  The pressure has continued to hold on the #2 and the gas and oil production has held so the well is not showing signs of watering out.  If it did, there are multiple zone above so there are a number of options there as well.  I am also looking to improve our water-hauling contract to reduce the expense. 

The original Recommendation was for a sidetrack to try and produce the Yegua Sand at a much greater depth.While I realize this would be more expensive than the current proposal, is there any way to compare the potential production (reserves) of these different zones? I know this may be an unanswerable question but I am wondering why we would come so far up-hole if there are zones with high potential lower in the well. Is this about the water?

We attempted completion last spring and we explored all the lower zones at that time.  We have tried to avoid the sidetracking idea as it could run $200,000-$250,000 compared to this at $14,800. 

San Antonio, TX        Info@TerraFinaEnergy.com        210-305-5100