GulfSlope Energy Inc (GSPE)

[Gspex]

It discovered trapped oil. Wasn’t a dry hole. It was oil, not natural gas which is very good. The rig and drilling crew/supervisors were able to test out all the rig components, and drilled to about 5700 feet with no problems. At this point the volume of producible oil is being calculated, which is a complicated process. But it wouldn’t have to be very much to make a producing well economically viable. Also, whatever hydrocarbon indicators they were using to identify prospects in the shallow section have now been validated and calibrated, so any other anomalies on the block will be very low risk.
The objective of Canoe was to find oil that could be tapped to give the small partners some income. And to make sure the rig was in good shape and could move on with confidence to the really challenging deep wells. Given that, I would say the well was a complete success. It wasn’t a barn-burner, but they left the wellbore in condition to be reused, rather than abandoning it. Looks like Selectron/Corvette will be the second deep well, and it’s right next door. So I wouldn’t be surprised to see the rig back at Canoe in 6 months or so to drill a production well. In the meantime they will get the best possible estimate of recoverable oil and negotiate with nearby platform owners for a tie-in to their facility. Not bad for their first exploration well. Now, on to the big oil stuff.