Replies to post #237598 on ERHC Energy Inc (ERHE)

[Krombacher]

Degen,

Very good question. We can only speculate.

For example, if I were Sinopec and thought one of the 4 wells might not "count", for example, let's say there was a big gas kickback/explosion and the required depth was not reached (we have no idea what the required depths must have been in order to satisfy the PSC's), then I too would drill an optional well, just in case.

Of course, there could be other reasons too for an optional well.

Krombacher

[vineseeker2]

DG, I think you are correct in the "hurried through drilling" idea being off base. All the wells in block 3 & 4 were drilled by a state of the art drill ship with all the instrumentation any geologist could dream of. I believe the analysis of the data SNP recorded was more of a problem. SNP had not done any deep water wells before these, nor had Addax. Coupled with high pressure and tempature the analysis must have given SNP a chalange and sent them after new talent for their teams. Total took over Akpo from another company who did not have the expertise to develop it. SNP may want to access some of that talent now or may have already. They may also be playing games where SNP is telling Total we'll show you ours if you show us yours, about drilling results and plans for next phase.
Total has two drill ships at Egina and plans on a new FPSO for that development, they also have a gas pipeline to a LNG facility in OML 130 right next door to block 1 & 2, the value of these things to the JDZ may be part of what is being barganed & planned with the JDA.

[Krombacher]

Ok check this out for the reason for the optional well:

Minimum Work Obligation - The Work Programme Commitment should be phased into three exploration sub periods (of 4 years, 2 years and 2 years). The Minimum Work Obligation is two wells (or the equivalent of one well worth of 3D seismic data and one well).

http://www.nigeriasaotomejda.com/Pages/Petroleum_Legislation.html

So maybe one of the wells in Phase 1 was not "worth of 3D seismic data" and so an optional well had to be drilled?

Krombacher