Valued Partners,
The ASE 18#1H (Phase 2) is one step closer to commencement as we are very pleased and proud to announce that after what has proved to be one of the most challenging projects we have undertaken, the ASE 5#1H has been successfully drilled to a total measured depth of 13,850 feet, yielding a horizontal displacement of 5,000 feet. We drilled the well path using high-tech geo-steering technology through the entire length of the Granite Wash “G” bench, and during this process, we saw very encouraging results from the physical cuttings which had good fluorescence under UV light indicating oil in the formation. In addition, our gas readings have also been strong further confirming substantial quantities of hydrocarbons in the G bench of the Granite Wash formation.
At present, our team is pulling out of the hole and preparing equipment to complete the well, and once the cement has fully cured we will start preparations for the hydraulic fracturing (frac) process. This week we once again met with Hadaway Engineering to finalise the exact frac design and have liaised with Quasar who is the company engaged to conduct the frac.
Wayne Beninger (Geologist & Petroleum Engineer) has now analysed the entire mug log and here is a quick summary of his findings:
Based on the ASE 5#1H mud log, it appears that we have found exactly what we are looking for which, based on oil and gas production matching the log, confirms that much of the west side of the ranch can now be considered more productive than previously thought.
Along the lateral from the heel to the toe, the Granite Wash (GW) is seen to contain chert up to 20% but usually less than 10% if it is present at all.
Throughout the lateral length we see sections with higher shale content (up to 10%). There are also sections with 10-40% carbonaceous shale. These shales can release natural gas when penetrated but its presence is not expected to have much impact on productivity.
We had shows of oil fluorescence and oil cut throughout the entire lateral, which was sampled and recorded at least every two feet. The lateral was drilled in such a way, out of necessity, as to pulverize the rock making it easy for the mud to wash the hydrocarbons out of the sample before lab analysis. Even so, there were approximately 1,500 feet of strong oil cut and fluorescence. Since there were shows of oil cut and fluorescence everywhere, and this is a continuous rock layer in a single trap, Wayne suspects that the entire lateral would have shown the same strong oil indications except for changes in drilling speed, mud properties, and mud circulation rate. Further, very good gas concentrations were also observed over the entire lateral length.
The mud log gives us a strong expectation that a properly designed, staged, fracture stimulation of the ASE 5#1H well should result in highly commercial production rates for both oil and gas.
In summary, the entire ASE team is extremely pleased to have finally drilled the well and the preliminary results from mug logs look better than expected. In the coming weeks, we hope to have completed the well in preparation for the frac, which is approximately a three-day process. It is our intention (as long as everything goes to plan) to have this well in production in August.
Regarding the Phase 2 well, Deane Pierce (Registered Petroleum Engineer) has conducted another site inspection (21st of July) on the proposed ASE 18#1H well location, and in the coming weeks our team will complete the permitting and start planning the drilling pad's construction.
