Zion Oil & Gas Inc (ZNOG)

[KyOil]

Well Test Summary

Step -1 - Geologic Studies Before Drilling Maps from seismic and gravity studies indicate target suitability along with data from other wells. The Energy Ministry would have reviewed all these documents prior to issuing the drill permit.

Step 0 - Drilling Shows Observations while drilling are not specified in the Energy Ministry test document. Observations include gas and oil shows, and initial formation assessments while examining cuttings. For MJ#1 significant shows were gas presence and heavy components indicating oil such as butane and propane. Oil was also observed. The Energy Ministry would have received this info in daily briefings.

Step 1 - Initial Pressure Test It is no coincidence that the first test required by the Energy Ministry is related to pressure since pressure is the first order parameter that determines whether a well is productive (commercial). For MJ#1 high pressure was encountered at 2000 meters and adequate pressure of 7,500 psi at TD, so this is a very confirming sign. The Initial Pressure Tests are ran with a wireline before casing each section. The purpose is to identify which zones are of interest for testing after casing. Most significantly, the Energy Ministry would have known of the high pressure encountered at 2000 meters just before issuing the 2 year license extension.

Step 2 - Pressure Transient Test Again, notice that pressure is the key parameter. That should be a clue that pressure is very important for a well. Therefore high, or at least adequate, pressure in a well is a good confirmation of productivity. The primary purpose of the Pressure Transient Test is to characterize the geometric size of the reservoir and define its flow characteristics. This is done by analyzing the pressure signature under two conditions: a) as the well flows to lower pressure, and b) when the well is shut in so that pressure recovers. The geometric size of the reservoir (along with voids data from wire line tests) gives an estimate of oil-in-place and some idea of % recoverable oil.

Step 3 - Production Flow Test The well is flowed at various valve positions at the surface, which creates varying back pressures on the formation. This information is used to identify the optimum flow level for the well and gives an improved view of how much oil can be recovered. For MJ#1, its possible that the pipe size inside 4-1/2" casing will limit the wide-open portion of this test. But, future production wells to be drilled from the same pad will be optimized in casing size based on learning from MJ#1.


Steps 0 and 1 are done while drilling, so have been done since Feb 2018 for MJ#1. We are now waiting on the report from steps 2 and 3 for MJ#1. The size and productivity of a reservoir can affect steps 2 and 3 (larger and more productive takes more time). The final call whether the well is commercial can not be made until step 3 is complete. But, increasing confidence grows through each step. And with good pressure and oil shows during steps 0 and 1, and large geometric size from step -1, my confidence is very high that the reservoir is commercial.

Everyone do their own DD!

Again, thanks to MrBojangles for asking if a test plan could be found and to RSummers for finding it!

http://www.energy-sea.gov.il/English-Site/Pages/Regulation/NFT_829_2016%20Guidelines%20for%20Conducting%20Production%20Tests.pdf