Jonsie, as I recall, awhile back you asked me some good questions about TIV's upcoming water flood program and below is some general water flood information which hopefully will answer some of your questions. In a nutshell, water flood programs usually cause more oil to come out of the ground (thats what they are designed to do) but its not a slam dunk (geology rules) and it usually produces long term results, if successful, not a near term fix for cash flow and/or a pps rise caused by enthusiastic buying, like we need right now (i.e. enthusiastic buying).
Here's my take on initiating a secondary recovery program (i.e. water flood) on a property or zone which previously only had primary recovery. Keep in mind this is an reservoir engineering project, which is designed, orchestrated and implemented by a reservoir engineer. The geology (structure maps, x-sections, stratigraphy, etc) has already been done by the geologist(s) long ago. Also, since I don't have access to the details of this property, I made many assumptions.
First, you need to drill core holes to get a better handle on the rock/reservoir characteristics like permeability, fracture patterns/orientations, porosity, oil viscosity, etc., etc., which it sounds like they have done, or are doing. Then, the engineer designs the flood pattern (5-spot?) and more wells (production and water flood wells) are drilled and/or converted to accommodate water flood wells and producers to optimize water flooding and oil production. It sounds like some of this has already been done too. Simultaneously the surface facilities are designed by a facilities engineer, purchased and put in place. The water is injected into certain injection wells/zones for quite awhile until the pressure builds up to a certain pressure and there are certain "responses" in the offsetting production wells. This can take many months (years?) before the reservoir pressures are built up in flood zone. And of course it takes many months after that to produce the wells to know if the program is an economic success (i.e the net sale of oil far exceeds the costs of water flood program, even after you discount your dollar at 10-15% over time).
I look at any water flood program as a great project to produce millions of barrels of more oil which was previously unrecoverable (increase EUR from OOIP) on primary, assuming the water flood project works as engineered, but the consequential added cash flow, assuming it is an economical project, will take many months (years?) to realize.
So, I sure hope TIV has something SIGNIFICANT and much more NEAR TERM up their sleeve to announce (not about hiring, commencing water flood, commencing PV, new titles, etc.) to STOP THE SHORTS from COMPLETELY destroying the company while we wait for this secondary recovery project to make a difference to the bottom line. Oh, one thing I forgot to mention, this ALL assumes the price of oil stays at, or around, $35-60 barrel (or better). If it CRATERS to $9/barrel, like it did in 1998, we're screwed!
Geo
AI
