Star Phoenix Group Ltd (fka RGRLF)

[TONY THE TIGER UK]

Douginil/All
Sorry about the links it was a cut n paste f£$k up..
Repost of original with thanks to Urban Trader

I had a long chat with a friend who is also invested in RRL, RMP, HRN and more importantly Shabeel.

We talked about whether or not we thought Shabeel was duster and I thought I would share some of our comments.

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HRN is on a tight timescale with the first two drills because they have to satisfy the terms of the PSA.

Now, more than ever this is important because I imagine the Puntland Government has companies lining up to take over in the event that the PSA is breached - and money talks, not loyalty

HRN encountered a potential pay zone of 12-20m section of oil and gas shows indicated by a petrophysical analysis of downhole electrical logs - This was not expected

HRN tried a wireline formation tester but this was unsuccessful (look at my link to wireline formation testers at the bottom of this page) - but this was unsuccessful.

This to me suggests that the oil is there. So what if a wireline formation tester was unsuccessful. There are a plethora of tests that will succeed of fail depending on how the oil is trapped.

BUT - and here is the important bit. HRN cannot afford to hang around performing lots of open hole tests because time is running out and they have got 2 drills to complete to fulfil the terms of the PSA. Don' forget, as per the RNS of Feb 23rd, 2012 - "Puntland Government has granted an extension of the first exploration period expiry date to October 17, 2012" That gives us 5 months to complete this well and the next well.

So, they decide to drill on and test later after they have got to TD and cased the well.

Also, the primary target is of much more interest because this confirms an extension of the Yemen basin.

WHY - because they can be drilling the second well whilst testing the first.

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Now let's look at the wording of the RNS of April 11, 2012

"We are encouraged by the results to date and pleased that we have confirmed the presence of an active petroleum system in the Dharoor Valley. We look forward to drilling ahead into the primary objectives of the well and hope to confirm the shallow prospective zones by testing in the near future."

Compare that with the wording of the RNS of March 7, 2012

"While we are encouraged by the hydrocarbon shows in the well, there is still a great deal of information which must be collected before we are able to properly evaluate the results to date. We look forward to reaching the main objectives and appreciate the continued support of the Puntland Government and the local residents."


this wording suggests to me that HRN was more bullish in April than it was in March but they are a lot more restrained in their wording as opposed to PLs fireworks and dancing because he's found a few drips under his car.

I suspect we're going to here great news from HRN whether or not the oil is commercial.

Also, if HRN had found anything to suggest it was not worth continuing with Shabeel-1 - surely HRN would plug and abandon and move on to the next well sooner rather than later, or done additional seismics or whatever they deemed was needed because that 5 month window is closing rapidly. So the fact that they are still drilling is a very positive sign.


Worst case scenario

None commercial oil, but an active petroleum system and more analysis can give us a better indication of where to drill and how deep

Best case scenario

20-25m payzone in addition to what we were targetting

And a load of shale down there that may be worth fraccing


THESE ARE ONLY MY OWN THOUGHTS AND OPINIONS.

regards

UT

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Links below:

Fundamentals of Formation Testing

http://www.slb.com/~/media/Files/evaluation/books/fundamentals_formation_testing_overview.ashx

Introduction to Well Logging

Well Logging

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I WOULD RECOMMEND WATCHING IN THE ORDER 3, 4, 2, and then 1



Overview of the Petroleum Industry | Part 1 |

API, Rocks, Basement, Sandstone, Limestone,

Overview of the Petroleum Industry | Part 2 |
Formation of Oil and Gas, Exploration, Seismics, Logging, Core, Maps

Overview of the Petroleum Industry | Part 3 |
Drilling and Logging

Overview of the Petroleum Industry | Part 4 |
Producing, Separating, Fraccing, Pipeline, Refining, Distilling

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Alun Whittaker's Mud Logging Hand-book

http://mudloggingman.com/default.aspx


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Based on the "unsuccessful wire logging" of Shabeel-1I've spent all morning searching for "why would you bother with cased hole testing if open hole wire logging is unsuccessful".

This page is probably the best answer yet:

http://ipims.com/data/fe11/G4322.asp?Us..




Another document on logging that is also worth a look it this one:

http://www.odplegacy.org/pdf/operations/science/lab_procedures/cookbooks/downhole/logging_manual.pdf


This link provides much more information on a Wireline Formation Tester

http://www.slb.com/~/media/Files/resources/oilfield_review/ors94/0194/p21_28.ashx