Once again, I have received very good news from our Joint Venture Partner, EnerMax. We've had six additional shows at West Janice #1, and drilling has been suspended temporarily to perform a much needed drill stem test (DST). I have included EnerMax Inc's President Bret Boteler's detailed letter to me,regarding the wonderful progress being made with West Janice #1 so you can better understand what good news all of this is.
Partners,
I have some exciting news!
We have had three additional shows in the West Janice #1 since my last update. The fourth show was in the ABO Formation. The show was from 8,875' - 8,920' or a total of 45' (Show Report #4 attached hereto). The fifth show was in the Wolfcamp Formation. The show was from 9,040' - 9,050' for a total of 10' (Show Report #5 attached hereto). The sixth show was also in the Wolfcamp Formation. The show was from 9,150' to 9,165' for a total of 15' (Show Report #6 attached hereto).
I have included a comparison of our mud log to an ABO well (Hendrix) drilled and produced in this area. The well made 186,000 barrels of oil from the same type mud log show. Just as I mentioned in an earlier update, you certainly don't drill a 12,000' well to produce at 8,875'' however it's nice to know that we have a reservoir in place that should recoup our investment dollars even if we don't hit our primary reservoir. Combining this reservoir with the San Andres, we feel that we have created some tremendous value in our well bore up to this point.
We have stopped the drilling process temporarily to perform a drill stem test (DST) on the Wolfcamp Formation. This test will provide us with reservoir pressures and the percentage of oil saturation and the quality of crude. The test will take approximately four to six hours to complete. A drill stem test is a procedure for testing the surrounding geological formation through the drill pipe. During normal drilling, fluid is pumped through the drill stem and out the drill bit. Instead, in a drill stem test, fluid from the formation is recovered through the drill stem, while several measurements of pressure are being made. The basic drill stem test tool consists of a packer or packers, valves or ports that may be opened and closed from the surface, and two or more pressure-recording devices. (A packer is an expanding plug which can be used to seal off sections of the open well, here to isolate them for testing.) The tool is lowered on the drill pipe to the zone to be tested. The packer or packers are set to isolate the zone from the drilling fluid column, and testing measurement begins.
Once we have the test results I will prepare a report and post another update. At that time I will be providing comments on how the engineers and geologists feel about the quality of the Wolfcamp Formation that we've encountered. We will resume drilling shortly after the tests are complete and expect to be able to make it to the Devonian Formation with the new bit we will be drilling with.
The current depth of the well is 9,237'. I have attached the most recent drilling report for your review and will keep you updated as information becomes available from the field.
Regards,
Bret Boteler
President
Sincerely,
Management
Permian Asset Management, AVV
Caya Dr. J.E.M Arends 14
Oranjestad
Aruba
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This press release / email may include forward-looking statements as defined by the Securities and Exchange Commission. Such statements are those concerning forecasts, estimates, expectations and objectives for future operations. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the company. Statements regarding future production, reserve additions and capital expenditures are subject to all of the risks and uncertainties normally incident to the exploration for and development and production of oil and gas. These risks include, but are not limited to, inflation or lack of availability of goods and services, environmental risks, drilling risks and regulatory changes. Investors are cautioned that any such statements are not guarantees of future performance and that the actual results, or developments, may differ materially from those projected in the forward-looking statements.
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