Dear Valued Investor Partners,
We hope this update finds you well.
In this portal, we will provide you with the latest developments regarding your investment in Phase 2 of the Cherokee project.
June Production Performance:
STRATEGIC DEVELOPMENT PLAN UPDATE
Enhanced Water Injection Strategy: We are making small steps toward progress on our innovative water injection approach. We are currently in advanced discussions with an adjoining operator who is disposing of 400-500 barrels of water per day. Our plan involves laying a connecting pipeline from their wells to our injection wells, substantially increasing both pressure and water volumes into the Skinner formation.
Formation Analysis: As discussed in previous portals, the Skinner formation lacks a natural drive mechanism (typically gas or water driven). Our historical production data confirms the Skinner formation produces little to no water, which indicates the presence of oil within the rock matrix that can be mobilized through enhanced water injection.
Current vs. Projected Capacity: Before the SWD was offline, we were pumping approximately 100 barrels per day into the injection well. This new development would increase our water injection volumes by 400-500%, and potentially create the pressure differential needed to optimize oil recovery from the Skinner formation.
OPERATIONAL STATUS & CHALLENGES
Well 8-9 (Water Supply Well): Currently offline due to a tubing leak requiring pulling and joint replacement. Given current commodity pricing, the economics do not support immediate intervention. However, we continue to monitor market conditions for optimal timing.
Well 3-9 Recompletion Plans: We have identified the 3-9 well as an excellent candidate for recompletion into the Skinner formation. This strategic initiative remains in our development pipeline, pending more favorable commodity pricing, and based on the level of success yielded from the additional water injected into the formation
IMPLEMENTATION STRATEGY
Capital-Efficient Approach: Our goal is to implement this enhanced water injection strategy without requiring an additional capital call from investors. We are formulating multiple funding strategies to execute this plan while preserving investor capital.
Market Timing: We continue to await more favorable commodity pricing before proceeding with major interventions, ensuring optimal economic returns for all stakeholders.
COMMITMENT TO PROGRESS
Rest assured, we are working diligently on solution-focused strategies for Cherokee Phase 2. Our technical team remains committed to unlocking the substantial potential of the Skinner formation through innovative, cost-effective approaches. We will provide additional updates as soon as they become available.
ASE NEW INVESTOR PORTFOLIO MANAGEMENT PLATFORM
Moving forward, all monthly statements will be accessible through our new Investment Portfolio Platform. If you have not yet received your registration email, your Limited Partnership is next in our setup queue, with registration emails being sent on a rolling basis. All remaining registrations are expected to be sent by August 18th.
For any questions or assistance with platform access, please contact Claudia Van Brugge at claudia.v@alphasevenenergy.com.
UPCOMING COMMUNICATIONS
Our next investor portal update will be released on August 11th (US time).
Best regards,
THE ASE TEAM
