ASE 8A & 8B Valued Partners,
Since our previous portal update, we are two steps closer to completing the Lois 1 well, as we have started to receive some of the components/parts which have been on order for an extended period of time. The estimated time of arrival for the final parts is 2-2.5 weeks. Once we receive these parts, our team will commence the ASE rig 3 mobilisation to the Lois 2 location, which will then allow Yellow Jacket to perforate the well, followed by Quasar to complete the sand stimulation process.
In the coming weeks, our team will complete the road construction and drill the rat hole for the Lois 2 well, in preparation for the ASE 3 rig to be moved off the Lois 1 location and repositioned at the Lois 2 drilling pad. Once all of the required safety checks have been completed and the approval has been ed, we will commence the drilling operations, which is estimated to be a 7-10 days process.
Wayne Beninger (Geologist) and Deane Pierce (Petroleum Engineer) completed a conference call with a highly experienced production engineer. He confirmed what our team has been stating is true, "the key to the Misener/Hunton formations success is drawing down the fluid levels and keeping them down, in order to let the oil flow, while controlling the gas."
Prior to the current arctic weather descending on Seminole County, we were in the process of making yet another attempt to increase the rate of total fluid from the wells and reconcile contradictory observations between wellhead observations, downhole tests, and gauged volumes in the tanks.
We know from log analysis and the ASE #4 core analysis that the Misener/Hunton (MH) contains a significant saturation of oil and good porosity. However, even after stimulation, we have not seen the expected fluid volumes in the tanks and the oil cut has been lower than expected. We have tried multiple pump types, different pump configurations, and moved the location of the pumps from above the perfs to below the perfs. Because of the low total fluid volumes measured in the tanks compared to the theoretical volume of the pump design, it seemed that either the pump efficiency (less than 50% when 80-90% is normal) was severely impacted by high gas volumes or the wells were "pumped off." Also, we observed surface casing pressures that were higher than ideal and became concerned about the back pressure we were holding against the reservoir preventing it from flowing.
We shot fluid levels in the wells and determined that, in fact, the fluid level in the casing annulus was high which means the wells were not pumped off. The pressure exerted by that column of fluid combined with the surface pressure makes it near certain that the flow from the reservoir is much lower than it could be. Further, we tested for cut and pump rate at the wellhead that showed the pumps were moving much more fluid during the short duration of the test with a higher oil cut than we were measuring at the tanks on a daily basis.
We lowered the pumps below the perforations to reduce the amount of gas that went through the pump (instead, it flows up the annulus to the surface) which should improve pump efficiency, yet it did not. The idea was to increase the rate as much as we could (get pump rate closer to the rate the reservoir could produce) to lower the fluid level which would improve the volume of fluid the reservoir would produce and should also increase the oil cut.
We decided to focus on solving the issues on the ASE #2 well since it was producing the highest volume at the highest oil cut yet still at a much lower volume to the tanks than it should be. The pump is designed to produce between 250 and 300 barrels of fluid per day (bfpd) but we only measure 80 to 100 bfpd at the tanks with a widely ranging oil cut from 10% to 90%. Reservoirs don't act this way. Using a 5-gallon container we measured the time it took to fill using a valve at the wellhead instead of at the tanks (30 yards away). It took about 36 seconds (a little less than 5 gallons). We did it 3 times (see pictures attached), 1.5 to 2 hours apart, and all 3 tests showed the same rate and the same oil cut (about 30%). This 36-second test equates to a daily rate greater than 250 bfpd. This directly contradicts the volumes measured at the tank.
In summary, we have concluded that the tests show the pump is capable of doing 250+ bfpd, yet only half the volume of fluids enters the tanks (water & oil tanks). While collecting the sample bottles the well is free to flow. The wellhead tubing pressure is measured to be 120 psi. The pressure at the separator in the tank battery is 40 psi (picture attached). Allowing for friction (only 30 yards separate the wellhead from the separator) and elevation difference (if any) there should be no more than a 20-25 psi drop.
In conclusion, we believe that the flow lines (beneath the ground) are in some other way restricted. Once the weather improves our team will implement remedial works to resolve the oil line issue.
Since sending out the Alpha Seven Energy 2022 Strategy email three weeks ago, we have seen a large number of investors book-in a call/Zoom meeting with McLoughlin (COO). In addition, we have had our Dallas-based team call each investor to confirm they did receive the email and to ensure we have addressed their questions and queries. There were a few investors that our team was unable to connect with. If you have any questions please email .m@alphasevenenergy.com
Last week we offered all Seminole County investors the ability to invest in our Mesa Vista project, receiving a percentage of the net revenue generated from selling the unit/lease (group of leases) and a double allocation of gas revenue. Over the past week, we have had a massive response and we now have very limited availability. If any investors would like more information, please book a call or Zoom meeting by clicking here.
Below is a summary of all other Seminole County project developments.
As the ASE 1 well continues the final flowback phase (approximately 95% removal of stimulation fluids) and is now in its dewater stage, we expect to continue to see improvements in oil production.
Over the past two weeks, the ASE 2 well's oil production has not seen any substantial increases in volume.
In the past two weeks, the ASE 3 and ASE 4 wells have not seen any sizable improvements.
