We have included EnerMax Inc President Bret Boteler's detailed letter to me, regarding this great news about West Janice #1:
Partners,
Our technical team has had an opportunity to evaluate the West Janice #1 Logs and they are confident that we have good productivity in the Wolfcamp and Devonian, plus the bonus of the ABO and the San Andres. Our team, as well as regional experts are continuing to analyze the logs and correlate to offset wells and our seismic data. This process will require several days to complete. Part of the process involves tying the deviation survey (due to our inclinated well bore) to the electric logs shot by Halliburton. One of the regional experts we are using is a Halliburton West Texas Log Expert. His initial comments are that we have productive reservoirs in the Wolfcamp and Devonian.
Another encouraging fact is that when we tripped back in the hole with our drill pipe to condition for running production casing we experienced an 8,000 unit gas kick. This kick lightened our mud from 9.2 to 8.8 pounds per gallon (ppg) and revealed a light sheen of oil on the pits. We have increased our mud weight to control the flow of the well but we are still experiencing gas kicks ranging from 300 to 1,500 units. We are certain this gas is coming from the Devonian Formation. We will continue to manage the flow back of the well until we are confident that it is safe to run our production casing.
The explanation above should answer the question "If we finished drilling and logged the well why does it look like we're still drilling?" The answer is that we must completely clean out all of the cuttings and condition our hole so that we can successfully run production casing. The fact that the well is trying to produce oil and gas means that this process will take more time to accomplish. It is my estimation that we will have the hole ready to run casing sometime tomorrow.
Many of you have asked what an FMI Log is and what it is used for. An FMI Log is a Fullbore Formation MicroImager and it provides microresistivity formation images in water based mud. FMI images differentiate the specific sections of reservoirs that should be perforated in order to maximize the production levels of your well bore. It is very effective in West Texas, especially in the Wolfcamp, ABO and San Andres. The cost of the test is approximately $25,000, but worth every dollar. It can make the difference between a marginal producer and an excellent well. I made the decision to run the FMI over the entire Devonian, Wolfcamp, Woodford Shale, ABO and San Andres formations that appear to be productive from the Mud Log and/or the Electric Log. The only downside to the FMI is that it takes a couple of days to get the results. To learn more about an FMI Log you can click on the link below.
http://www.slb.com/media/services/evaluation/geology/fmi.pdf
I know that everyone is anxious for me to give an estimate of daily production and overall reserves. I will provide this information once we have collected all of our data and we are confident in our correlations. I will express, however, that I agree with all of our technical team in their belief that we have a nice discovery on our hands and that we are all very excited.
I have included a copy of the one inch mud log, total depth mud log and the electric log sections that correlate to the potentially productive reservoirs as indicated by the mud logs for your review. I will be sending a complete copy of the electric logs once we have gotten all of our data back from Halliburton.
Sincerely,
Bret Boteler
President
About EnerMax:
EnerMax, Inc. is a petroleum exploration company that has been aggressively pursuing technology driven oil and gas projects since 2001. Known for it's strategic and efficient operations, EnerMax has recently been featured by Norman Schwarzkopf's "World Business Review," Platinum Television Group's "Pulse on America," and "U.S. Business Review," a national publication.
For more information visit: http://www.enermaxinc.com.
We hope that all of you are as happy as we are here at Permian and realize that Industry Partners like EnerMax, Inc are what make this all possible.
Sincerely,
Management
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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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