Oddly, no real following for PCI. Seems somewhat strange to me given the very active drilling campaign on going:
Anyway, a brief run down on PCI:
I do like that PCI has research notes on its website, together with the presentations:
Presentations (AGM, Oilbarrel etc):
Everything you really need to know is in the various reports and presentations above.
The main attractions for me are the fact that they are nicely financed with cash of c$90m. $50m of which came form Iberdrola, the giant Spanish utility last June (well timed) at 13p per share Iberdrola had a 22% holding in the company. That has ow fallen to 18% due to the last funding in April that raised $40m at 7p.
The Ibedrola alliance is very important for more than just monetary reasons. As part of the deal, it has the right to invest $55m in one of PCI's assets to acquire a 49% stake in that asset. $7.33m has already been paid and therefore is deductible from the $55m.
Iberdrola is obviously mainly attracted by the Algerian assets. It is part of the MEdgaz group that completed a pipeline form Algeria to Spain which is due to come on stream at the end of the year. Obviously PIC could provide a good source of gas for that pipeline.
Just focussing on Algeria for now:
Most of the activity in Algeria can effectively be deemed "appraisal" rather than pure explo.
The Isarene licence is in the prolific Illizi Basin. The activity to date on the licence is 18 wells, 16 of which flowed oil, gas or had hydrocarbon shows.
The main problem is permeability, especially in the deeper Ordovican reservoir which is wide spread but lower quality than the Devonian being tight. BP used Wide Azimuth seismic over tis neighbouring In Amenas licence and as a result was able to target the natural fractures and following fracing, development wells there are reported to flow at 80M cfd.
Essentially, as Ive said above, the main targets can be considered appraisals.There are four areas of interest in the Isarene licence. The second explo period ends in April 2010. The current campaign addresses these main areas:
- Issaouane Sud and Issaouane NW (ISAS-INW)
- Ain Tsila
- Hassi TabTab (HTT)
- El Biod
ISAS was drilled by PCI in 2006 and encountered gas but had flow rate problems. when tested from the three zones. Since the target extends into the Northern Block, a joint study has been conducted with Medex who have the Northern block rights. This study included data from Medex on their discoveries that has recovered gas form the Devonian reservoir. Sonatrach's old wells have recovered oil with the GTT-1 well flowing at 447 bopd under test. As a result of the study, ISAS is the first stage of the programme.
Second target is Ain Tsila and the largest structure on the licence. The target here is the deeper OOrduvician reservoir. Again, previous wells have recorded gas in the Orduvician. This is where the WAZ study will come into play as drilling will attempt to target fracture sweet spots. The Davy reort makes mention of 6TCF in one study of the play.
HTT is already is already acknowledged by Sonatrach as potentially commercial following the HTT-2 discovery. As a result this is being left outof the campaign.
Finally there will be a well on El Biod. PCI believe this is an oil possible. But there are no previous wells. Davy have a 10% CoS on the PCI P50 resource estimate of 332M bbls.
From the Davy report:
ISAS - 250 BCF
CoS - 80% Geological, 50% Development
HTT - 100BCF
CoS - 80% Geologiccal, 50% Development
Ain Tsila - 1,381 BCF
CoS - 66% Geological, 50% Development
El Biod - 332M bbls
CoS - 10% Geological, 50% Development.
PCI is not just about Algeria, there are some very attractive assets in Italy (on shore and offshore) and Tunisa but this thread is just about the Algeria campaign.
Results of campaign .
First test rest on the second well drilled (AT-1) on the Ain Tsila Ridge.
The well flowed 11.4 mmscf/d of gas (13,451 cubic metres/hour) with a flowing wellhead pressure of 205 PSI on a 2' choke setting, and at a rate of 7.75 mmscf/d (9,144 cubic metres/hour) with a flowing well head pressure of 1458 PSI on a 32/64' choke setting. The associated condensate rates were 210 barrels of condensate/day on a 2' choke setting, and 233 barrels of condensate/day on a 32/64' choke setting. The well was tested under natural flow and was not fracture stimulated. Testing and sampling operations at the well have now been completed.
Wireline logging results at the well were better than pre-drilling estimates, due primarily to the confirmation of a deep gas water contact at 1948m, and better than expected reservoir porosity and permeability values in the objective horizon. The well has been completed for possible future use as a production well.
The key was to have a commercial flow rate. Tristone (now since departed) were looking for >5 mmcfd. So weve blasted past that. Most encouraging was the flow being natural and not fractured - seems as if the WAZ survey was indeed successful in locating areas of better natural fracturing.
AIn Tsila Ridge is a big prospect - see above. This is thus v good news and no wall eyes turn to AT-2, which is now coring in the objective (as per today's RNS)
AT-2 Test Result
The well test on well AT-2, on the Ain Tsila Field, Isarene permit (Blocks 228 & 229a), Algeria, following fracture stimulation ("fracturing") has resulted in gas flow rates in line with expectations, of 4.9 mmscf/d*. A discovery declaration has been filed with Sonatrach for this well.
AT-2 also logged 4m of gas bearing sandstone in the Devonian F2 horizon. The Company plans to test this shallower gas-bearing interval, using a workover rig, at a later date.
Remember that this is 12kms to the South of AT-1 so extends the play and derisks the 2-5 TCF estimate for whole of AT still further. So worth noting that the RNS today also announces:
Drilling on the AT-3 well, 9km to the south of AT-2 has now been completed. The well logged a gas column in the Ordovician reservoir in excess of 80 metres. With testing of the AT-2 well completed, the Company plans to test the AT-3 well
The rig will now move to drill the INW-2 well in the north west of the block, on the Issaouane NW prospect. This well will target both Devonian and Ordovician reservoir objectives.