Dear Valued Investor Partners,
We trust this update on Cherokee Phase 2 finds you well.
We are pleased to share the latest developments following strategic discussions among our contract Operator, Bob Pfannenstiel (Geologist), and Rob Berry (Reservoir Engineer). Leveraging their extensive experience, we have devised a targeted approach aimed at enhancing cumulative oil production across our Cherokee wells.
On Tuesday, August 20th, we implemented a temporary bridge plug between the Red Fork and Skinner perforations in the Cherokee 5-9 well. This step diverts all injected water directly into the Skinner formation. With the Skinner formation being open in the nearby 9-9 well, our objective is to create a pressure "kick," potentially leading to a significant increase in oil production.
The Cherokee 9-9 well, located approximately 700 feet from the Cherokee 5-9 water injection well, is expected to benefit from this strategy by mid-September. Currently, the Skinner formation in the 9-9 well is producing around 3 barrels of oil per day (BOPD) with zero water production. Given the excellent porosity of the Skinner formations in our 9-9, 7-9, 5-9, and 3-9 wells, we believe that a lack of pressure and gas drive may have constrained production thus far. By isolating the Skinner from the Red Fork in the Cherokee 5-9 and injecting water directly into the Skinner formation, we aim to enhance pressure and drive oil towards the 9-9 well.
If this strategy proves successful, we plan to perforate and open the Skinner in the Cherokee 3-9 and 7-9 wells, further boosting production. We are optimistic about the potential outcomes.
In tandem with diverting water from the Red Fork to the Skinner in the 5-9 well, we are actively "dewatering" the Red Fork formation. The significant volume of water extracted from this formation has exceeded our initial expectations. As we continue dewatering, our goal is to observe a gradual increase in the oil cut from the 3-9, 7-9, and 8-9 Red Fork wells. A positive shift in the oil cut would indicate the effectiveness of our strategy—a result we are all striving for.
The Cherokee 3-9, 7-9, 8-9, and 9-9 (Skinner) wells are all online and in the production phase. We will closely monitor the 9-9 Skinner and the Red Fork formations in our other wells over the coming weeks, and we will keep you informed with the latest updates as they become available.
For July, Cherokee Phase 2 sold approximately 468 barrels of oil. Revenue from this production is due to be distributed to each investor partner in September.
We look forward to keeping all investor partners updated with the progression of Phase 2, as we work towards boosting production and the payable monthly investor revenue distributions.
Best regards,
The ASE Team
