Lgx Oil & Gas fka OIL

[bcjt]

ANALYSIS from another poster i found,it is a great post below.


Go to http://www.oilexco.com/ , go to the 2003 annual report (Adobe format), scroll down to page 6 until the map is on your screen. Look at that map, east is on your right, west to the left. See the Balmoral platform, we know it is 8 km from 15/25b-6, 15/25/b-3, the Brenda block is 5 km wide. That gives you the scale.
Read the paragraph in the annual report above the map, it says 15/25b-6 and 15/25b-3 well are part of the “same oil accumulation” as West Blair, in other words the Brenda East pool goes right over onto the next block to the east and connects with west Blair.

15/25b-8 in the middle of the Oilexco block, about 2.5 km west of the eastern boundary, is part of the same Brenda East accumulation, and tested 4785 barrels a day.

Look at the 15/25b-9Y on the map, it’s very close to the eastern boundary. 9Y flowed 2648 bbls, 40 ft of perfs in 50 ft pay, 40 degree oil, "in a test designed to evaluate flow characteristics above the identified oil/water contact." This is also the Brenda East pool.

Now we come to the last three wells, 12, 12Z, and 12Y. first, 15/25b-12 hit 15 feet of oil over water 1.5 km south southwest of 9Y, and 12Z hit 60 feet of oil pay about halfway (0.75km) between 9Y and 12. This is “an extension of the Brenda East accumulation”. Then, looking at the map, the 12Y well, the one being tested now, 64 feet of pay, is two kilometres southeast of 9Y, which puts it, on Oilexco’s land, about 2/3 of the way down to the south boundary from the 9Y well, close to the east boundary.

If you print off the map you can rough plot all this and measure. You could measure about 1 km east from 15/25b-8 to 15/25b-6, then measure down almost 2 km from 15/25b-6 to the edge of the blcok where the connected Blair pool crosses onto Oilexco’s block. Then measure down to the approximate location of the 15/25b-12Y well 2km southeast of 15/25b-9. You can measure the distance in a straight line from the approximate location of 15/25b-12Y to 15/25b-8, that’s about 4 km. These are all in the same Brenda East oil accumulation. If you’ve done all this on paper, on the map you’ve printed off, you end up with an outline of the Brenda pool with sides approximately 1km X 2km X 2 km X 4km. Shade it in, that’s the minimum size. Well, by golly, that’s a pretty darn big pool, why it could be almost as big as that nearby Glamis pool on the map.

We know that it pinches out not too far to the southwest (15/25b-12 got 15 feet of oil over water) but it could significantly extend beyond our conservative Brenda East map in other directions.

We also know that 15/25b-9 on the west side of the block, 1 km away from 15/25b-8, appears to be a part of a different accumulation, West Brenda. One other well is into Brenda West, 15/25b-10, 2km W of 15/25b-8, 1.2 km N of 15/25b-9 (measurements from Sep 30 quarterly report), which puts it right on the western boundary. 15/25b-10 was a single well not a cluster and it flowed 3351 bbls, 50 ft gross pay, 35 ft perfs, “rate limited by testing equipment available”.

So we do have a very big Brenda East pool, use your brain, do a little work, you can draw a picture of it. Sproule, very conservatively, gave Oilexco’s first well about 15 million barrels “proven plus probable”. Lets give all the Brenda East wells with good pay zones an average of 15 million barrels – there’s 15/25b-8, 15/25b-6, 15/25b-3, 15/25b-9Y, 15/25b-12Z, 15/12b-12Y. That’s 90 million barrels. But guess what, reservoir engineering takes a bit of a leap when you can prove two wells are connected. For example, take 15/25b-9Y and 15/25b-12Y, you can draw a little 15 million barrel blob around each well or, if they are connected, stretch the two blobs to cover all the space in between, same thing with the 15/25b-8 and 15/25b-12Y, they are about 4 km apart but they’re both Brenda East so you can fill in all the space in between with proven reserves. So 90 million barrels is low, it’s almost certainly well over 100 million. Bonus, there’s Brenda West with one good well into it, 15/25b-10, that could be put on production, no idea of the size of that, must be another at least 10 or 15 million barrels there.

All in all, I’d say 120 to 150 million barrels, easily, probably more because I’m limiting the Brenda East size to what’s defined by wells, there could be significant extensions in several directions. This is all from press releases, the 2003 annual report, the Sep 30 quarterly report, no guessing, no wild flights of imagination, just based on the facts, publicly available information.

Merry Christmas.