Operation Plans and Focus
We are currently focused on completing our ST9-12A #4 well in Fisher’s Reef Field in Galveston Bay which was drilled in early 2012. In addition to this newly drilled well, our broader focus is on increasing production from all four fields in Galveston Bay and Trinity Bay. Based upon our geological review and analysis, there exists numerous opportunities within each field to quickly and easily increase production without the necessity of additional drilling. It is our intention to focus on this “low hanging fruit” and then proceed to consider additional drilling projects.
Specifically, Red Fish Reef Field which was recently brought back on-line having been shut-in for over a year, holds a great deal of additional potential. We will first focus on the production infrastructure of the field and then focus on the individual wells. One of our initial projects in the field will be to reduce back pressure on all wells by implementing the use of a pump on the production platform in the bay. This reduction in back pressure could increase production by as much as 15-25% before additional work is done to increase the production rates from individual wells. Of course, the next step is to begin work on those wells that have the most potential for the least risk. Our field study has indicated several high priority projects that we expect to initiate within the coming months, including several wells that require only minimal mechanical repair to reestablish production.
Outside of Galveston Bay, our geological and engineering team headed by our Vice President, Steven Carter, have been actively developing drillable prospects in South Texas as well as participating in drilling projects on a minority basis. Our recent successful participation in the Palacios #1 well is beginning to bear fruit and we hope to continue on this track. The focus is primarily on generating our own in-house drilling projects which can then be promoted out to industry partners and investors on a traditional third-for-a-quarter basis. This strategy reduces our exploration and financial risk to an insignificant level.
In this process, our geologists must first locate and research hundreds of potential prospects before finally discovering projects they believe have significant potential. After an iterative process of review and rework between our engineering and geological staff, these prospects must then be submitted to management for investment review at which point a decision is made to move the project forward and begin capital investment, which likely entails leasing acreage to secure the prospect, drafting and printing of maps and presentation materials for marketing, and finally marketing the prospect to potential investors and partners. Our exploration department has already identified at least 4 different projects areas outside of Galveston Bay that appear to have significant potential in excess of a million barrels of oil equivalent, primarily focused on oil-rich targets rather than natural gas.
"My well came in big, so big, Bick and there's more down there and there's bigger wells. I'm rich, Bick. I'm a rich 'un. I'm a rich boy." - Jett Rink
