Dear Valued Investor Partners,
We trust this update finds you in good health.
Contained within this portal, we are pleased to provide detailed information on the following topics:
1. The Status of the Cherokee 2-9 Well:
We will offer an overview of the current status of the Cherokee 2-9 well, along with a brief explanation of why the oil production achieved to date has been lower than expected.
2. Phase 2 Commencement and Pressure Maintenance/Water Flood Strategy:
The current timeline for the phase 2 commencement and how we have huge confidence that the pressure maintenance strategy/water flood will have a substantial impact on the production of the Cherokee 2–9 well.
1. Currently, the well is temporarily offline as we upgrade our facilities to its permanent location and enhance our 3-phase power system to comply with all OCC (Oklahoma Corporation Commission) requirements. Dylan Knight, our co-founder, and senior partner, is on-site overseeing these works, including road preparation and Pad for phase 2. Dylan will provide more detailed insights in a video included in this portal.
Regarding the production of the Cherokee 2-9 well, the initial months involved dialing in the well to find the optimal strokes per minute and fine-tuning the pump jack. In recent months, the well has experienced downtime due to various reasons, such as abnormally cold weather, connecting three-phase electricity, and other essential scope of works post-drilling. Once this work is completed, the 2-9 well will be back in full operation promptly.
2. We are delighted to share the good news that we are set to commence drilling the phase 2 wells, starting with the Cherokee 3-9, which will serve as a water injection well. Drilling is scheduled to start this weekend!
In this phase, we will implement a water flood/pressure maintenance strategy. Our geologists and the entire ASE team are confident that the Cherokee 2-9 well, being in the top right-hand corner of the Phase 2 pod of wells, will greatly benefit from this implementation.
Thorough research on surrounding units/leases that have undergone a similar strategy has demonstrated substantially higher than expected hydrocarbon recovery, in some cases resulting in exceptional production volumes. The potential of the water flood is significant, with up to 80% of the total recoverable hydrocarbons anticipated to be extracted in the first 10 years and the remaining (up to) 20% in the subsequent 8 to 10 years. It is important to note that the pressure maintenance may take up to 6 months to take full effect.
We eagerly anticipate providing you with more updates shortly.
Best regards,
The ASE Team
