Here is the progress I think we have made on MJ02:
1. Drilled 1st section and cased. Complete per Zion PR.
2. Drilled 2nd section and cased. Complete per Zion PR.
3. Drilled 3rd section and cased. Complete per Zion PR. (a)
4. Drilled 4th section and lined/cased. Complete per Zion PR.
5. Ran log tests. Complete per Zion PR. (b)
6. Ran initial pressure test. KyOil speculates complete. (b)
7. Ran flow/pressure test. KyOil speculates complete. (b)
8. Stimulated. KyOil speculates complete. (c)
9. Ran flow/pressure test. KyOil speculates complete. (d)
10. Test and drill data report given to the Ministry. KyOil speculates near complete.(e)
11. Field development and economic plan creation. KyOil speculates being worked on in earnest.(f)
12. Announcement of commercial discovery and production lease. Zion stated test results will be provided in 3Q; KyOil speculates it will be a commercial announcement of modest size, and with additional potential in the 3D area specifically, and in the license area generally.
Notes
(a) This is the section with troublesome shale that Monty Kness reported on the ASM.
(b) Test steps required by the Ministry of Energy.
(c) Zion said MJ02 would be stimulated. Most wells are stimulated either with simple techniques like perforation/acid up to complex techniques like fracking. We don't know what stimulation is being used on MJ02.
(d) Ministry of Energy requires a repeat of the flow/pressure test after stimulation.
(e) Early test data like logs and flow/pressure that are done before stimulation have already been given to the Ministry. KyOil speculates the final flow/pressure data is being organized now to be given to the Ministry.
(f) Our new board member, Mr Starr, should be tremendous help with this. Its a ton of work to plan the number and type of wells, capital requirements, expenses, and revenue vs time. A positive NPV assuming 10% annual cost of money has to be compelling in order for the Ministry to grant a production lease. The NPV quantifies the economics of a commercial discovery. Its one thing to find oil. Its another for its recovery to be economic. Zion will not share the NPV and nor should they. But they should share the reservoir size and flow rates of MJ02.
Please note carefully where it says "KyOil speculates...." This is based on my experience, time passed, the Ministry's testing requirements (public info from their website), and Zion PRs of activities taking place. Please perform your DD and own your decision.
