bdahl385, I too concur with your scenario 1 based on the following Hemi 2008 PR's regarding the Collins.
And although the Collins was capped it came in with very strong gas pressure and results, also note the references made in these 2008 Hemi PR's about the lease sites surrounding the Collins Hemi-1.
Now one can started relating this to the Silvey Hemi-1, the other operational sites in this area (Reno, Tebbins, Purcell) the data just released by Hemi (Bennett B) and the case by Hemi for both the location selection and commitment to move forward with this Silvey Hemi-1 horizontal drilling project.
Again, with the use of a map of this SEK area you will note the proximity of these other Hemi lease sites to the Collins, one you locate the Collins then move east and northeast to locate these other Hemi sites. Also note the creek formation of this area as well.
Kels
Hemi Energy Group Announces Collins Hemi 1 Well Results
Thursday July 31, 9:51 am ET
FORT WORTH, Texas--(BUSINESS WIRE)--Hemi Energy Group, Inc. (Pink Sheets: HMGP - News) is pleased to announce exceptional results from the drilling and completion of the Collins Hemi 1 well.
President and CEO Keith A. Anderson is quoted as saying, "During drilling of this well I felt this was going to be an exceptionally strong well as the drill cutting were bleeding oil from the samples." Mr. Anderson continued, "The open hole log suite confirmed a Squirrel payzone that we are producing is about 13 feet thick and with top 10 feet clean sands with excellent porosity and good resistivity showing through that interval with oil saturations of 55% or greater. This was the main reason we waited so long until the weather and ground conditions cleared so that we would not have accessibility issues with this well, which is comparable to many Texas type oil and gas wells. The well is currently flowing natural gas, gas condensate and oil and is not being pumped yet. At one point we were venting significant volume of natural gas, potentially valued over $ 5,000 per day in management's opinion. In addition to the multiple payzones referred to in previous press releases, we also have discovered a yet-to-be-named 12-feet-thick payzone at approximately 600 feet deep in this well, which also contained exceptional saturations of oil. The oil well on the Collins lease has 4 to 5 times the pounds per square inch (PSI) of an average shallow oil well in southeast Kansas that generally has less than 500 PSI borehole pressure. We have 100% working interest and 80% net revenue interest in the Collins lease that is not considered a mature field and has had no prior oil production."
Collins Hemi 1 Well Developments
Friday August 22, 9:45 am ET
FORT WORTH, Texas--(BUSINESS WIRE)--Hemi Energy Group, Inc. (Pink sheets: HMGP - News) -- The results of the successful drilling and completion of the Collins Hemi 1 well has resulted in the natural gas cap in place with strong reservoir pressures and additional multiple coal bed methane and oil/gas formations being discovered in the Collins Hemi 1 well in Woodson County, Kansas. The well head equipment needed to safely produce and control the gas pressure in the Collins well has been installed. This new well continues to show characteristics comparable to many Texas type oil and gas wells that have good oil production with slower decline curves. This oil and gas well is in the process of development to achieve maximum production efficiency of both marketable reserves from this new field. Current production is at a necessarily choked back rate in this process and is less than 1/6 of the potential rate of production to an equivalent of 22 BOEs per day. The well's oil cut is increasing daily and is currently producing more than 5 bbls of oil per day in this restricted rate and still venting gas to control the pressure and determine the optimum controlled volume of natural gas that will be produced for sale and to safety produce the crude oil. There are several options being considered for the natural gas pressure issue in order to insure long-term oil production at a much higher rate based on industry experts' opinions and experiences. There is clearly a very marketable quantity of natural gas from this well. The options of selling the natural gas and gas condensate is being evaluated by a company that specializes in this area of expertise in Texas.
Hemi will be drilling more new wells on the Collins & our adjacent leases as the geological information derived about the pay zones from the discovery well clearly justify the new field's further development. Hemi has a 100% working interest and an 80% net revenue interest in the Collins lease as we also have more than 10,000 additional leased acres in Kansas. The new oil and gas well on the Collins lease continues to validate what the company has thought about the Cherry Creek and East Owl Creek oil trends and confirms we have found one of the strongest areas in this developing trend based on well logs. This well is demonstrating the characteristics that are in new wells that have longer lasting oil production at a higher rate because the very important natural gas dissolved in water solution drive is clearly present in this high pressure well in Kansas that are not present in mature wells.
President Keith A. Anderson issued this statement: "The Collins Hemi 1 well is exhibiting all the characteristic's of being a discovery well located on the southern flanks of the Cherry Creek trend, which appears to extend 4 to 10 miles north by northwest of this well. Additionally it appears this well and our surrounding lease acreage maybe positioned on an anticlinal fault trapping mechanism. We have discovered significant amounts of natural gas present in this field and are currently negotiating a market for this gas. Once we have established a market for this gas, shareholders should expect to see a dramatic increase in the oil and gas production over the choked back production numbers we currently are producing. Upon establishing a market for this natural gas we will aggressively continue drilling and development of Collins and other undeveloped lease acreage we have located along this trend, in a Southeast to a Northwestern pattern. I would like to acknowledge we have taken more time than usual to complete this well, we have experienced weather delays and with the discovery of additional Coal Bed methane and conventional oil and gas pay-horizons present in this well. We chose the side of caution and await lab and engineering analysis/results before completing this well and putting it into production."
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