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There are two types of drilling activities taking place; 1) reentry of existing wells and 2) drilling new holes.
Capital needs were calculated for both of these activities based on conservative most likely needed case. For some of the wells not all steps within the AFE might be needed, but this is impossible to predict until the activity is complete. Capital cost will be by invoice thereby representing actual cost needed on an activity by activity basis. For economics full cost were used- representing a more conservative cash flow outcome.
For both cases a typical initial monthly production rate was estimated for an expected side and low side case to show the range of possible outcomes.
Reentry of existing wells using much of the existing well infrastructure and can thereby be a significant cost savings but with the limitation that one can only drill deeper and much of the existing formations has been seen. The upside under this situation is to find a deeper “untapped” zone or work over or recomplete an older existing zone where there have already been some production using modern technologies. The expected side arte was 30 barrel of oil per day (BOPD).
New drills will cost more but have a greater advantage in finding new uncompleted zones. New drills typical have greater Initial production (IP) rates. The expected side arte was 45 barrel of oil per day (BOPD) and a low side of 25 BOPD.
Included with the new drill is a “Sweet Spot” case of 200 BOPD. This is the desired target for any new drilling and represents a play that crosses the acreage. This is the Home Run for any new drilling.
The Sweet Spot Play is a newly recognized play that runs across the Kent lease (see Map 1). The two wells noted by stars are in this play especially well B-30 located some 1,500 feet off the acreage with an initial IP of 2,700 to 4,000 BOPD in the 1920’s. This play is still undeveloped and has only recently been recognized for what it is. Now that we know why wells along this play pro\duce so well the play can be developed with a high degree of success.
The first week of January 2007 a well 1.5 miles to the southeast drilling near the Powell fault at a depth of 2,200 ft encountered the zone. The well was immediately shut-in when oil started flowing out of the hole. The first 3 days over 1,700 barrels of oil was trucked off the lease before the well could even be finished and completed. An offsetting well 600 ft away on this lease accidentally intersected the fractures above this zone when being drilled in the 1990’s. This well had initial flows of oil of over 300 BO per HOUR.
The zone is not very wide but probably exist for miles along the Powell fault. Filled with oil, highly fractured, under pressure form the Woodbine formation below which was developed in the 1920’s on a 2 acre spacing with many of the first wells producing overt 1,000 BOPD. This Woodbine field is the second most prolific Woodbine in East Texas having produced over 200 million barrels of oil.
Sweet Spot” Cross Section –below is a diagram for the play across the Kent lease (see Map 1). The two wells noted by stars are in this play especially well B-30 located some 1,500 feet off the acreage with an initial IP of 2,700 to 4,000 BOPD in the 1920’s. This play is still undeveloped and has only recently been recognized for what it is.
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