IAE, Follow up on Stella from Investor village
Somebody asked for the follow up so here it is:
Wellington says 12.4MM bbl increase in Stella reserves to 19.8MM - $4.60 target Stella – A Quick Way to Double Reserves “Overnight”
Stella appraisal well has confirmed over 820 feet of hydrocarbon column and flowed 2,850 bopd on significantly restricted rates. Results of the Stella appraisal well drill stem test (DST), drilled to appraise a large down flank extension of the Stella field, confirmed an additional 500+ feet of hydrocarbon pay bringing the total measured hydrocarbon column height to in excess of 820 feet (Exhibit 1). On test, the appraisal well flowed 2,850 barrels of light oil (39º API) on significantly restricted rates due to the restrictions of the equipment on board the drilling rig. 22.5 feet of good quality Andrew Sandstone reservoir was encounter with an average porosity of 22% and average permeability of 30 mD (top of range was 74mD). The light oil encountered by the appraisal well matched managements expectation that gas, condensate and oil coexist in the same reservoir. To further the understanding of the Stella reservoir, management’s next step will be to sidetrack the appraisal well “up-dip” to determine the pressure and hydrocarbon composition at a mid-flank location. Drilling of this sidetrack will take approximately 15 or so days and would allow for a more detailed development plan to maximize ultimate recoveries. Successful recovery of hydrocarbons from the down flank encountered by the appraisal well supports the conclusion that Stella is filled to spill with hydrocarbons (Exhibit 2). By increasing the depths at which hydrocarbons are found we believe Ithaca will be able to book up to ~39+ mmboe gross (19.8 mmboe net) of 2P reserves for Stella in the Andrew sandstone alone (i.e. does not include the deeper Ekofisk zone of interest). This would be a 168% increase over the currently booked ~14.8 mmboe gross (7.4 net) Stella reserves in the Andrew sandstone interval. Overall this would result in a potential 33+% increase to Ithaca’s overall 2P corporate reserves and would thus be hugely material.
