Phase 2 (ASE 18 1H)
Valued Partners,
Here is the very latest from our Mesa Vista Phase 1 project, so to keep all Phase 2 investors up-to-date with the progression of the project. We are currently at 12,090 ft (total measured depth) drilling our horizontal well path in the 6-1/4” hole section, and our on-site crew is making a clean out trip while waiting on a new directional motor to arrive on location. Drilling in the 6-1/4” hole will continue until we have reached the 5,000 ft horizontal wellbore placing us midway into the Granite Wash “G Bench” target formation.
During the horizontal drilling process, we engaged with our mud logging company to analyse the cuttings from the target formation. At this stage, we have achieved some very encouraging results from the mud logs which show good fluorescence under UV light indicating oil in the formation. Our gas readings have also been strong further confirming good amounts of hydrocarbons in the G bench.
Wayne Beninger, our Geologist, took McLoughlin through the mud logs, in which Wayne stated that based on the current logs, the ASE 5#1H well should achieve our Benchmark B estimates or greater. This is a substantial statement as Wayne is quite conservative in his estimates and normally likes to underplay his data-backed predictions. We recorded the Zoom meeting for all investors to watch. Please note, that there are two versions, a full-length video and a 17- minute condensed version (see both links below).
Daily drilling fluid engineering continued with 24-hour, on-site supervision. Lost circulation preventative material and chemicals are being added to maintain optimum fluid properties and avoid lost circulation.
We have been “geo-steering” the horizontal leg with real-time gamma ray logs fed via a satellite link to the G&G experts who “guide” the directional drillers for path corrections. Wayne Beninger is supervising this process. Until the well has been drilled (5,000 ft leg) our experienced mud loggers will continue collecting formation samples as well as gas readings. As mentioned above, we are seeing fluorescence in the cuttings indicating oil saturation as well as good gas readings.
Once we have drilled the horizontal leg, we will set 4-1/2” production casing and cement it. When the cement is fully cured, we will perforate the various stages to prepare the well for the hydraulic fracturing process. We have upgraded the 4 ½” specifications to pump more fracturing fluid at a higher pressure based on offset well analysis.
We met with and committed to Hadaway Engineering for the completion services and are presently finalizing the hydraulic fracturing design with Quasar to lock-in the number of stages and optimize the stimulation of the Granite Wash based on Hadaway’s extensive experience in the area. Hadaway's team has completed close to 25 horizontal wells on the Mesa Vista Ranch, and upon their advice and reviewing the logs they believe we should be able to change the original 13-14 stage design and increase the total number of stages up to 21 and substantially increase the amount of fluid and sand to be pumped. Deane Pierce (Petroleum Engineer) still believes the ASE 5#1H well should produce between 500 to 750 barrels of oil per day initially based on offset vertical wells as well as data from several horizontal wells on the ranch. Hadaway strongly believes we will meet this target or exceed it by expanding the number of frac stages and increasing sand/fluid volumes, potentially producing up to 1,000 barrels of oil (peak) per day.
Hadaway has begun a review of the existing facilities to determine any repairs/upgrades needed. We hope to have all of this installed for the frac flowback so we can begin selling oil and gas almost immediately.
We continue to meet with the gas gathering company and will finalize the gas contract and gas line specifications with them in the coming weeks. We have received bids for water hauling and disposal of produced fluids and are in the process of seeking an oil sales purchaser.
