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Rotterdam to FOIL - PART II

lse:hur

#614

Not so.
The infamous XEL had official 2P figures, 90% of which were 1P and they got nowhere near as far as HUR now.


#615

@Flossoffa
“Sandstone is conventional, basement is not and so it is not surprising that there is a degree of scepticism evidenced in the SP. We think that our oil has good water drive, but it needs the EPS to demonstrate that it is indeed water drive and not gas driven and will continue ad infinitum…”

Floss, as ‘little’ Barbados is alleged to have said on our entering WWII: ‘Carry on Great Britain; we are right behind you’ -or words to that effect - I am with you here.

My knowledge of ‘sandstone’ vis-a-vis ‘deep’ basement recovery will not stress a Penny Black postage stamp if written thereon. However, I would have thought that Dr T, et al, in their proven competence thus far (broken rope excluded. Ahem!) would have done all their calculations to validate the theory that the deeper into the basement, the greater the exerted pressure to compensate for the absence of the gas impetus.

For my part, I am quite prepared to take my chances and hold and/or increase to await the validation (or otherwise) of the EPS. I shall not be panicked by doubters - I am in no way gainsaying their right to be sceptical - into losing hope and thus selling prematurely. For the absence of any doubt, I am NOT writing about Ricfle here, whose views I highly respect. I’m thinking of the BIG BOYS out there! PDYOR. Kr,A. - LLV


#616

Yes in the absence of anything much happening at sea, it is quite nice to speculate without the nuisance of any knowledge of the oil business to limit our wanderings:

For oil to be present in the basement, the rocks have to have been contorted by tectonic pressure, opening up fractures and voids. The basement has to have ended up higher than the source rock from which the oil has migrated into those fractures and voids. The oil is pushed by the heavier water that has drained down from the surface through gaps in the impermiable layer (which is fortunately unbroken above our deposits and prevents the basement oil being squeezed out and up to the surface as a tar lake).

It is immediately not obvious why water should shoulder aside heavier rock in order to penetrate the depths, but don’t worry, it doesn’t. It simply percolates down through the gaps and fractures in the strata to completely fill the voids and even the gaps between the sand grains.

Some of these rocks originally contained oil but water being heavier, it displaced the oil which was therefore pushed upwards until in some places, it encountered an impenetrable `ceiling’. It then accumulated to form the oil deposits that we can then tap.

The water drive' can be envisaged as a U tube in which one arm is water filled and the other is (partly) oil filled. The oil filled side would overflow driven by the higher pressure from the water side unless it is capped. Thatcap’ is the impermeable layer which prevents the oil flowing to the surface, (which it can do when drilled).

It is not just water than can be trapped under the impermeable layer, gas too will accumulate there, and that too is pressurised by the water column, so although gas will expand to fill the space left by oil as it is extracted, that expansion is limited by the compression resulting from water flowing into what has temporarily become a low pressure region i.e. gas can move faster than water, but ultimately it will be recompressed into its original volume (unless it escapes through the drill hole).

So when you say `compensate for the absence of the gas impetus’, it is important to recognise that the gas is effectively only an intermediary, it is the water drive that is doing the
work.

I am not sure that I have added anything useful here but I like to explain things to myself to make sure that I have got it

Florrect


#617

Here isa link to Spirt Energy fame in presentation:

https://www.hurricaneenergy.com/~/media/Files/H/Hurricane-Energy/documents/presentations/20180903-Hurricane-GWA-Farm-in-Investor-Presentation.PDF

Page 7, note box in bottom left.

The Spirt deal is for half of the GWA (Lincoln 604m 2C and Warwick 935m P50).


#618

Yes the infamous XEL.

Just how did they get signed off on 90% P1, beggars belief when they never had the finance to develop their field.

I cannot see Hurricane trying to feed their share holders a line of BS like that and RPS will not sign off on any more than 6 years of production from the FPSO as Hurricane have not sign a contract extension with Bluewater for 10 years.


#619

XEL did actually produce from their well test , which is more than HUR have done to date. :wink:


#620

@Flossoffa
"So when you say `compensate for the absence of the gas impetus’, it is important to recognise that the gas is effectively only an intermediary, it is the water drive that is doing the work. "

Floss, like I have said before, my good friend (now of treasured and distinguished memory), when highly impressed with something which I had said, would say, admiringly, ‘…That’s exactly what I was about to say’. I know so little on this oil extraction business that you will get no counter-argument from me, on your abovementioned.

What I am sure of is “… that Dr T, et al, in their proven competence thus far (broken rope excluded. Ahem!) would have done all their calculations to validate the theory that the deeper into the basement, the greater the exerted pressure to compensate for the absence of the gas impetus.”
Or whatever. Effective Oil extraction by any other means would be as welcomed. (Apologies to the man from Avon!) Kr,A. - LLV


#621

Aren’t fractured basements normally granite?
(not that I have any idea about what goes on down beneath the murky waters).

Re. XEL, it was a respected, independent company that did the CPR.


#622

So I believe but when I wrote:

`It (water) simply percolates down through the gaps and fractures in the strata to completely fill the voids and even the gaps between the sand grains.’

I was trying to build a picture of a continuous water column from the surface to the depths as one side of a U tube' balancing the other side which is partially oil to get my head round the idea ofwater drive’. It is not immediately obvious why there is water below the oil driving it uppards:

Thanks

MarriFlott


#623

Let’s hope the SP goes uppards.


#624

@Ricfle
"… Here isa link to Spirt Energy fame in presentation:
https://www.hurricaneenergy.com/~/media/Files/H/Hurricane-Energy/documents/presentations/20180903-Hurricane-GWA-Farm-in-Investor-Presentation.PDF
Page 7, note box in bottom left.
The Spirt deal is for half of the GWA (Lincoln 604m 2C and Warwick 935m P50)."

Thank you very much, Ricfle. Really appreciated. I shall spend a little time ‘playing about’ with these numbers, although in total they are not in much conflict with what I have been using, so I expect quite marginal impact (the 2P reserve may slightly affect the weighted average) on my original conclusions. I shall post (dear God, no!) again if there is any significant change to my calculations.

I shall have to reconcile the discrepancy of Lancaster’s original 728 m/bbls with the revised 523 m/bbls (37+486) and specifically the 2P & 2C apportionments, as this may affect the weighted average price per bbl.

The fracture between the high ‘low ball sandstone’ price (DNO got a bargain!) and the low value attributed to/for deep basement will have to await the verdict of the EPS, to heal (or confirm) that breach. I can wait.
Thank you again, Ricfle. Kr,A. - LLV


#625

But did XEL have a FPSO converted for $0.5 bn or a subsea instillation?

No, they had a few barrels of production and no plan beyond that. The comparison is rubbish, the competent person who signed off on this should be black balled.


#626

One of the main stumbling blocks that the market perceives for fracture basement, is early water break through. Without an aquifer drive this would not be a problem!

There is very little gas at Lancaster but some more at Halifax, due to the shape of the reservoir crown. From my understanding of the CPR, gas has not been considered as a drive mechanism.


#627

Not a problem, we should all be here to help each other and challenge preconceptions.


#628

Drawing oil out reduces the pressure and allows any gas present to expand and thus replace the oil extracted, but that lowered pressure means that the `u tube’ is temporarily unbalanced and water will flow in to replace the extracted oil and rebuild the pressure thus compressing the gas back to square one.

It is hard to think of a situation where water cannot serve this function but doubtless there will be some somewhere. In that situation the gas does the job of replacing the oil extracted until you get gas breaking through from above in a similar way to water breaking through from below when there is a water drive.

The problem for fractured basement is that unlike conventional oil soaked sand(stone), it is not homogeneous. The tortured granite has lots of micro-fissures (and even these will form a preferred network of relatively low resistance to flow), but the granite is also likely to have large fractures with very low flow resistance. Pumping will therefore draw oil preferentially from the large fractures (which have been deliberately targeted by the drill) until water is drawn up above the oil in the smaller fissures.

That increasing water column progressively reduces the suction at the entrance to the fracture until no more water is drawn in. Instead, the oil being lighter is drawn in from the surrounding fissures and all is well as oil is being produced.

But pump too hard and the water column in the fracture will rise to the point where the well produces a mixture of oil and water rather than just more oil. Coning has then occurred, but this is not a disaster, you simply have to reduce the production rate until it matches the rate at which enough oil is migrating to the bore fast enough to satisfy the demand and the coning water column in the large fracture(s) does not reach high enough to enter the drill bore.

At least that is my

preFlonception


#629

@Ricfle
“…and challenge preconceptions.”

Aah so.., Ricfle. As long as the ‘preconceptions’ are not challenged on the basis of preserving the status quo (sandstone mining) from such challenges or - that which seems to be happening ‘out there’ - it (fractured basement extraction) has not been done before. As has been pointed out on this forum, that is only new to UKCS. Kr,A. - LLV


#630

If you read the RNS dated the 9/9/16 on the vertical pilot well, this was flowed at 11k barrels per day. Why were Hurricane interested in flowing a vertical well that they would later partially fill, then side tracked to drill a horizontal production well and then carry out a further test on this well?

My thoughts are that while the vertical pilot well was flowed for a short time in comparison to a production well, it drew oil from 1 fracture zone, thus testing what a fracture zone could produce, or at least how it would behave at the maximum flow they could run it at. While all fracture zones are not created equal, the horizontal production wells have been drilled to intersect over 10 fracture zones, so there is no way to draw as much oil from each of the 10 fracture zone as the 1 tested by the vertical pilot well. The horizontal production wells are approx’ 400m above the OWC.

I can not see any problems with water.

As to the bubble point for the gas it is equivalent to a draw down pressure that would produce 40k barrels a day from a single well so is should not be a problem either.


#631

@Ricfle
"I can not see any problems with water.
As to the bubble point for the gas it is equivalent to a draw down pressure that would produce 40k barrels a day from a single well so is should not be a problem either. "

Ricfle, as the gentle old lady said while listening to the charismatic Politician speaking on stage, “I don’t understand a word he is saying , but I luuuve it.” Maybe not as bad with my lack of understanding of what you are writing here; but I love it just as much.

Hopefully, those of us who think that the Market is significantly undervaluing HUR’s Shares will soon be shouting a justified ‘eureka’ (interpretation: ‘We told you so’). Hopefully! - Kr,A. - LLV


#632

Thanks for the reminders, that is an amazing depth of oil. Intersecting 10 fracture zones suggests that the production flow rate can be very high and as you say, there will be no problem with water.

So whereas I was assuming that the EPS was to confirm how hard they could pump before having a water problem, it now seems more likely that they will be checking to see what the potential production rate could be and hence to see if the AM limits the production rate significantly. This then helps to settle the question of whether a pipeline with higher capacity would be

justiFloed


#633

If you look at the table in the top right of page 22 of this presentation:

https://www.hurricaneenergy.com/~/media/Files/H/Hurricane-Energy/documents/presentations/Hurricane%20Corporate%20Presentation%20-%204Q%202018%20SECURED.pdf

You will see that the bubble point pressure equates to 43k barrels per day production for a single well and Hurricane are suggesting production of 20k barrels per day, being well within the bubble point pressure.

While these figures are approx’ they give you a guide to the potential production.