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>>Sooo I ask where is the "news"???
Well, the news (to me) is that they've stopped drilling, and there is no date for going back in. It's also unclear if they can actually complete the hole, given how difficult the going has been. Up until now there was hope that they would get past the technical obstacles and actually get to something close to the planned total depth.
I agree that this is better news, by far, than a dry hole but it's definitely news of a sort.
hell of a day to put out an update....
GulfSlope Energy Operations Update
GulfSlope Provides Update on Drilling at Tau Prospect and Update on Corvette Prospect
RELATED LINKS
PDF Release PDF
HOUSTON, TX / ACCESSWIRE / May 13, 2019 / GulfSlope Energy, Inc. (OTCQB: GSPE) ("GulfSlope" or the "Company") today provided an update on drilling for the GulfSlope Energy Tau Prospect on Ship Shoal Blocks 336 and 351. The well was drilled to a measured depth of 15,254 feet, as compared to the originally permitted 29,857 foot measured depth. Producible hydrocarbon zones were not established to the current depth, but hydrocarbon shows were encountered. Complex geomechanical conditions required two by-pass wellbores, one sidetrack wellbore, and eight casing strings to reach the current depth. Equipment limitations prevent further drilling at this time. In addition, the drilling rig has contractual obligations related to another operator. Due to these factors, the Company has elected to abandon this well in a manner that would allow for re-entry at a later time. The drilling, pressure, and reservoir information has confirmed geophysical and geological models, and reinforces the Company's confidence that there is resource potential in excess of 300 million barrels of oil equivalent remaining in the untested zones. The Company is currently evaluating various options related to future operations in this wellbore and testing of the deeper Tau prospect.
The Tau well is designed to test multiple Upper and Middle Miocene sand series targets over a 14,000 foot vertical depth section down the flank of a salt feeder stock, and below the base of an associated salt sheet. The correlative target subsalt Miocene sand levels are oil productive at the nearby subsalt Mahogany Field, located approximately five miles to the southwest.
The Company's Exploration Plan ("EP") related to Vermilion Area, South Addition Blocks 375 and 376 (Corvette Prospect) was recently approved by the United States Department of the Interior, Bureau of Ocean Energy Management ("BOEM"). The Application for the Permit to Drill for this well is in progress and will be filed with BOEM in May 2019. The Company anticipates executing a rig contract for the drilling of the Corvette Prospect in May 2019.
The Tau Prospect is the first of eight drill-ready exploratory prospects that the Company intends to drill along the Louisiana Outer Continental Shelf, targeting the substantial oil potential of the subsalt Miocene play. By applying advanced seismic depth imaging technology and geoscience modeling, GulfSlope intends to achieve its goal of discovering large new oil and gas fields and creating substantial value for its shareholders. Aligned with its shareholders, GulfSlope management collectively owns over 20% of the common stock of the Company.
GulfSlope is the operator of the Tau well with a 20 percent working interest. Delek GOM Investments LLC, a subsidiary of Delek Group Ltd. owns a 75 percent working interest and Texas South Energy Inc. owns a five percent working interest.
If you are looking for a real reply, i would call them instead. I can't imagine they would put anything at all specific in writing at this point
Another sidetrack permit has been posted. Timeline is beyond confusing--date of request and date granted are both 5/3, while the requested spud date was 4/8. Kickoff point is only 11800'.
If anyone can make sense of that, I will be impressed.
thanks for the observation. The Port of Pascagoula lists Forte as "lay berth" (as opposed to loading/unloading cargo, undergoing repairs etc) until Thursday. Will be interesting to see if this gets updated to something related to the RC.
Well McMoRan supposedly spent >$300M on Davey Jones, so it could be worse!
It's apples to oranges, but it's kind of amazing to watch Exxon drill these 18000' ultra-deepwater wells off Guyana in 3 weeks, while we are in our 8th month here...
A few new filings at BSEE, all routine and related to plugging of the 202 well below the bypass/sidetrack. Otherwise we wait...
We are onto wellbore 177124069203 but interestingly 202 hasn't been filed as abandoned. Which makes sense if this is a sidetrack instead of a bypass (though it may just be that the filing hasn't shown up yet)
BOPs are standard when drilling offshore (and onshore, for that matter). The failure of a BOP was (among other things) a major cause of the Deepwater Horizon disaster. For better or worse I don't think we can read anything into that aspect of the well permits.
AST - Approved Sidetrack
Thanks for this, DB7. I am confused/surprised by the reference to stopping drilling at 16,500'
Why do the sidetrack if not to drill the total planned depth?
I guess we can now say that Friday's trading wasn't end-of-quarter tape painting shenanigans. Nice to see follow through on significant volume this am
Any thoughts on why Delek wanted the shares registered? It may just be so that they can keep their options open as far as selling in the future, but my assumption on this is that DK's plan is to buy GSPE out as soon as they start getting positive drilling results. I can't imagine (or maybe I just don't want to imagine) that they would quickly flip these shares for a few pennies)
I was in ALDW (a single-refinery MLP) back when it was controlled by Delek, and ultimately DK bought the remainder of the company at a price that was very favorable to DK. Shareholders made out fine as well, but I certainly don't expect DK to overpay for us when the time comes.
Also the link from a few weeks ago to the draft plan for Corvette is no longer working--not sure if that's because the plan has been withdrawn or it's just something wonky going on with the BSEE site.
Looks like BSEE just approved the revised sidetrack on Wednesday: https://www.data.bsee.gov/Well/eWellAPD/APD.aspx?SnAPD=-20408
Not sure what this means as far as timing--I hope/assume they haven't been forced to wait for this to move forward with drilling
Might GSPE not be on the Deepwater Drilling Activity List because they aren't drilling in deepwater? Tau is only in 300' of water, and BSEE uses 500' as the cutoff for deepwater.
Can we read anything into what GSPE *didn't* bid on? It doesn't look like there were any leases near Tau up for bid, at least--unless I'm missing something?
Yes, looks like it's right next to Canoe. Interesting!
GSPE is listed as the only bidder on SM 182:
https://www.boem.gov/Sale-252-Blocks-Receiving-Bids/
It's a very odd situation--raising capital for a well that is almost done. I wonder how much TXSO knows about the well status, and what they are allowed to tell potential funders?
Bids in the GoM lease sale were due today at 10:00, so in theory GSPE could release news now and not risk its ability to pick up new leases based on the assets.
Someone brought up Cobalt, which is probably the best analogue to what GSPE is trying to become (without the ending in bankruptcy, obviously). If you look at what the Cobalt assets sold for, it was roughly ~$3/bbl. At that rate, it's hard to see GSPE hitting a dollar from a single discovery. I would expect--and be quite happy with--20 cents a share or so post-Tau. There is plenty of room to continue to grow the valuation through additional discoveries.
Looks like they are going to just keep working with the Ralph Coffman.
I am a little confused by the timing, given that they didn't file notice for the bypass until a few weeks ago. I don't really see how they could drill all the way to TD from 4900' and then move the rig by mid-March
That's a tremendous find. Kind of amazing they had to go back that high in the pipe to drill a bypass, but it's good to see that they are committed to making this work. Wouldn't it be nice if they updated investors now and again on the status of drilling?
FWIW, the Port of Pascagoula has the Ralph Coffman arriving on 28 February, and then departing via the vessel Forte on the 7th:
https://www.portofpascagoula.com/Daily.pdf
I don't know how precise this is, but if nothing else it's a sign that the end of drilling is near
The disappointing news is that the 100MM barrel resource potential is down from 300MM potential if they had gone to TD. Still if they hit none of this will really matter.
Yep, someone is clearly getting insider info here. I don't know how you would keep the drill hands from sharing updates on a well like this.
In a way, though, it's helpful to have confirmed that someone or someones are trading ahead of news. It means that any major price changes, assuming they are on sufficient volume, going forward likely will tell us how the well is going before we get any actual PR.
Here is the full release--this well costs more than the market cap of GSPE:
Drilling at the Tau prospect extended to January 2019
Tel Aviv, December 27, 2018. Delek Group (TASE: DLEKG, US ADR: DGRLY) (“the Company”) announces that further to the Company’s Immediate Reports dated January 8, 2018 (ref. no. 2018-01-003307) and July 29, 2018 (ref. no. 2018-01-069795) concerning the exploratory drilling at the “Tau” oil asset (“the Drilling” and “Oil Asset”, respectively), described in section 1.8.6 of Chapter A of the Company’s 2017 Periodic Report (ref. no. 2018-01-031177), and according to the information provided to the Company by the operator, GulfSlope Energy Inc. (“the Operator”):
Drilling operations on the Tau prospect started on September 13, 2018. The Drilling is designed to test multiple Miocene horizons trapped against a well-defined salt flank.
According to the Operator, during drilling operations, the well encountered difficulties associated with shallow faults above the sub-salt stratum which requires changes to the Drilling plan, and is expected to cause a significant delay in its progress.
As of this time, the Operator has reported to the Company that Drilling operations are continuing and that in its opinion the Drilling is expected to reach the target strata during January 2019.
The Operator has requested the Drilling partners to approve a budget increase of USD 20 million (100%) for the continuation of the Drilling, so that the total cost of the Drilling (100%) will be USD 59 million. The Company's share in the said increase is USD 16million1
In addition, the Operator has updated the Company that in the light of the structural changes in the Drilling, the final depth of the Drilling will be 18,000 feet and will only penetrate the two main drilling targets (M1 and M1A), and will not reach the two secondary, deeper drilling targets (M3 and M4).
Just saw this--drilling will stop at 18,000'
From a Delek PR in late December:
"In addition, the Operator has updated the Company that in the light of the structural changes in the Drilling, the final depth of the Drilling will be 18,000 feet and will only penetrate the two main drilling targets (M1 and M1A), and will not reach the two secondary, deeper drilling targets (M3 and M4)."
Rowan had this PR today announcing the next destination for the rig drilling Tau, which pegs the completion date as "mid-January" though no doubt some of that includes time to plug the hole:
Rowan Companies plc (NYSE: RDC) announced that the Ralph Coffman, a 240-C Class harsh environment jack-up rig, has been awarded a one-well contract from CGX Resources in Guyana for an estimated duration of 60 days. The contract is expected to commence in the second quarter of 2019. The Ralph Coffman is currently under contract with GulfSlope Energy in the U.S. Gulf of Mexico through its current well, which is estimated to conclude mid-January 2019.
Canoe (probably) a duster, Delek says
From its Q3 results released today:
Exploration in the Gulf of Mexico began during August 2018 at the Canoe prospect. Initial results showed that layers of sand were found with oil, but the operator did not made an announcement of a discovery. The Group intends to further analyse the results in order to assess the Canoe's commercial feasibility. However, from additional data that has been examined and in parallel to the operator's assessments, the potential for hydrocarbon resources at the prospect is significantly lower than initial estimates. As such, Delek Group has taken a USD 11 million reserve for costs relating to drilling at Canoe.
A new campaign at the Tau prospect began in September 2018. Proximate to the date the Group's 3Q18 financial report was approved, drilling had reached approximately 3,000 feet below level, with the main target layer being in the range of 15,000-26,000 feet below sea level. So far, USD 28 million has been spent on drilling at Tau, out of a total budget of USD 41 million.
That all agrees with my thinking as well.
I'm curious: since you know the technical team at GSPE, what do you think of them? They had ranked Canoe as having an 80% chance of success, which is a little concerning. This is such an odd company--a penny stock drilling ultra deep wells.