Ruby and Balance -
As ever, you have been great posters - Thanks.
Ruby - Since I have been long in ERHE for almost 10 years (MRO and I got into this as a "quick turn" LOL), please don't take this as a bash. I am somewhat concerned to hear that the Rig has left the drill site. Unless the SEC has changed the rules on "Proven", I would think that they are required to drill stem test (DST) these sands to prove them up. Testing takes time -- After reaching TD, they will have to clean up hole (1day), run wireline logs, circulate to clean up, run and cement casing (2days?), perforate reservoir, run drill string into hole to DST,test, cement perforations, come up to next horizon and repeat.
They will have to test each horizon seperatly, as the Gov't would never allow them to comingle (nor would they want to).
TIME-TIME-TIME!
Can anyone find out if, in fact, they ran DST's?
Balance -sorry for the late response- I guess that the exploratory wells would be handled as expendable for a couple of reasons.
1. You've got "Wounded" casing since you hopefully perforated multiple horizons.
2. It'll be a while before you can use this hole in a production scheme, so any American company will expense the well for tax purposes, rather than capitalize it, as you can write off expensed items in the year incurred rather than amortize it. Don't know what tax regime that Chinese have, but just the operational considerations would argue to Plug and abandon.
Hope this helps.
Cheers,
Larry
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