Valued Partners,
Since the previous update, we began our directional/horizontal well path in a 6-1/4” hole after squeezing cement around the base of the 7” casing to ensure adequate stability. Drilling in the 6-1/4” hole continued to 8,530 ft and presently tripping out of the hole to pick up a fresh drill bit. We have approximately 300 ft left to go to begin the horizontal leg at 8,850 ft which would put us midway into the Granite Wash “G Bench” target formation.
Daily drilling fluids engineering continued this week with 24-hour, on-site supervision. Lost circulation preventative material and chemicals are being added to maintain optimum fluid properties and avoid lost circulation.
The horizontal drilling plan was fine-tuned and quality-control checked with the latest geologic maps with the final landing point at 8,850 ft. We will “geo-steer” the horizontal leg with real-time gamma ray logs fed via a satellite link to the G&G experts who will “guide” the directional drillers for path corrections. Wayne Beninger, our Geologist, will be supervising this entire process.
Once we have drilled the horizontal leg, we will set the 4-1/2” production casing and cement it. When the cement is fully cured, we will perforate the multi-stages to prepare the well for the hydraulic fracturing procedure.
We are currently finalizing the frac design with Quasar to lock-in the number of stages (up to 14 in total) and optimize the stimulation of the Granite Wash based on their extensive experience in the area. Our Petroleum Engineer, Deane Pierce, has reconfirmed his estimate of 500 to 750 barrels of oil per day initially based on offset vertical wells as well as data from a number of horizontal wells on the ranch.
In addition, our team has been working with an experienced facility company and is presently making a list of updates to facilities. We have located a pumping unit along with some instruments. We hope to have all of this installed in preparation for the flowback phase, thus assisting in expediting the time in which we commence the sale of oil and gas.
With everything going to plan we anticipate that we will be drilling the horizontal section of the well in the coming days and our team will be there to capture all of the action and provide video footage via the portal.
