Dear Valued Investor Partners,
We hope this portal update finds you well.
Since last Friday Oklahoma has been grappling with severe storms and heavy rainfall, which, unfortunately, has impacted our progress. While these weather challenges have slowed our pace, our dedicated team has persevered through adverse conditions to maintain momentum.
Here is a summary of the progress made, and the scheduled work due to be completed.
Cherokee 3-9: The well has been perforated (approximately 40-41ft) in the Red Fork pay zone and then acidized, in preparation to be hydraulically fractured (fracked). In an unexpected turn of events, shortly after acidizing the well, it started to flow back naturally, which is an excellent sign.
Our original plan was to make the 3-9 well the Phase 2 injection well, yet based upon this exciting development and other factors, which we will outline in this portal, there is now a high probability that the 5-9 well will be the injection well. We are having a meeting later this week with our geologist, engineer and operator to conduct our final due diligence and make a definitive decision, which we will provide in the next portal update.
Other factors to support our decision to convert the 5-9 well into the Phase 2 injection well include;
1. The Cherokee 5-9 well has been perforated, acidized and fracked in both Red Fork and Skinner formations, so by injecting water into this well it would support a dual pressure maintenance program instead of just a single zone (Red Fork).
2. The position of the 5-9 well would be more optimal as an injection well, as it is more centrally located, and thus should increase the effectiveness of our pressure maintenance program.
Cherokee 5-9: Based on the final confirmation of this well being converted into the Phase 2 injection well this week, we will submit the required documentation with the OCC to commence injecting water into this well. The injection well is estimated to take approximately 2,500 barrels of fluid per day.
Cherokee 7-9: Unfortunately due to heavy rainfall and where the well is positioned (at the foot of the hill) the road is not able to bear the weight of heavy equipment. Currently the well has been perforated, and barring more inclement weather this well is scheduled to be online by the end of next week.
Cherokee 8-9: The last well of Phase 2 has been successfully drilled. The impressive logs show that this well would be a great candidate for a dual completion and production in the Red Fork and Skinner formation.
Cherokee 9-9: Since midday on the 29th of April the well has been online, with our team spending the last few days making the final balancing adjustments and fine-tuning the pumping unit. Currently, we are removing approximately 300 barrels of load water, most notability oil came out in the very 1st stroke and today samples were taken over a 5-10 minute period, producing up to 100% oil. Currently we still have approximately 55% of the load water to remove, so the oil cut will fluctuate during this time.
There is a lot of excitement regarding this well, not only because of the promising early signs, but it is the only well we have completed exclusively in the Skinner formation, as the 5-9 well was dual-completed with the Red Fork, which contains approximately up to 75% water/25% oil. Our research based on other surrounding Skinner wells shows little to no water, so over the coming days as we remove the remaining load water, we will be able to see if this is the case with our wells. Promising early signs, coupled with its exclusive targeting of the Skinner formation, fuel our anticipation for its performance!
Phase 2 Tank Battery: Construction is now complete and at a stage where the fluids are transported via the underground lines and into the separator and tanks.
Dylan Knight is planning on returning to our Cherokee project by the end of the week, which will be shortly followed by another portal update and more comprehensive videos.
Best Regards,
The ASE Team
