The previous experience on TGD was, well, quite an experience.
After all the excitement about the placing, I found myself slightly surprised by the 90% COS figure that sems to have been blurted out: the guys have given themselves a one-in-ten chance of not only looking a bit embarrassed, but also of having the share-price trashed to well below NAV for some time afterwards.
However, it's all been said and done and in the interim I have been amusing myself by considering the well design. (Yep, some of us do get our kicks that way - no pun intended.) Incidentally, the phrase "over-engineered" has been quoted a couple of times and I think it's been misplaced - it's the well that's going to be over-engineered, not the rig!
Background
TGD-1X
We know that in July 2007, pressures of 12,000 were reported when TGD-1X reached 4625m (along-hole depth, I don't believe we know what the True Vertical Depth was.) The well was suspended and in announcing plans for TGD-1X-ST1 in Oct 07 Soco said that they had assembled the proper high pressure drilling equipment which included a 15,000psi BOP.
TGD-1X encountered hydrocarbons in two Oligocene clastic sequences, which were separated by a volcanic layer. Well logs over the upper sequence showed about 30 metres of net pay and they were unble to log the lower section, though at the time they suggested that seismic interpretations show another 300m of sediments above the basement.
As far as I can work out, the section below the volcanics is overpressured; that is to say, instead of the pressure-depth graph being a nice straight line, there is not only a change in gradient just below the volcanics, but quite possibly a step out as well.
TGD-1X-ST1
Holy moley.
Here's a quote from Ed in Oct 2007:
"We are particularly excited to return to the TGD structure. Success in the
deeper objective section of this structure could totally transform this company
and represent a significant milestone in the history of oil exploration in
Vietnam. Accordingly, we are quite anxious to resume our evaluation now that we
have assembled the proper high pressure drilling equipment.
We were all pretty excited too. How did it go?
I'm sure you don't need much reminding. Here's one reaction from June 2008:
Certainly a lot should have been learned from this dismal experience to bring any future well back within more realistic timelines. SW10's Law is affected by a number of factors, but it seems to me that there has been a surprising amount of human error on this well, mostly arising from contractors as far as I can see. They must have been spitting blood at Soco Towers: the frustration must just be immense. I'm sure it would be an attractive - if unrealistic - option to change out the contractors and maybe even the rig.
Alright, it was me.
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All the SNAFUs aside, ST-1 had limited shows whilst drilling the Oligocene, due to the higher mud weights needed to keep the pressure regime in check. Nevertheless, logging showed that the well encountered approximately 120 metres of good oil and gas shows in a combined gross interval of 570 metres. Permeability and porosity were preserved and Soco said they compared favourably with pre-drill estimates. In other words, they saw what they expected to see on the logs.
However, the rodeo ride to get this well drilled meant that it's integrity was poor and so the planned extension into the basement was abandoned.
Two drill stem tests ("DSTs") were planned in the high pressure/high temperature Oligocene interval. The first DST was over an approximate gross interval of 210 metres in the higher pressured zone below the volcanics layer separating the two over-pressured sections. The second DST was in the upper Oligocene interval above the volcanics layer over an approximate gross interval of 120 metres.
DST1: It's painful just to think about it. As Soco had it; downhole damage sustained during drilling and preparations for completion precluded recording meaningful sustained flow rates. After some Q&A, one poster noted that:
There does now seem to be the suggestion that the failure to get sustained flow was less to do with well damage per se (remember I suggested that perhaps solids were being produced) and more to do with a heavy fluid downhole preventing the well from coming in. A kind of equilibrium between the well and the fluid may have resulted in the well 'surging' back-and-forth without actually getting flow. Rather like that unpleasant feeling when you really want to burp but can't quite make it...
The shocker is that the heavy fluid, which would originally have been left to provide some protection against a blowout, may have reacted chemically with the production fluids put into the well prior to testing. This resulted in something heavier and/or more viscous and thus held the well back. Now, this is all supposition based on half-facts from a guy sitting several thousand miles away from the well and could be wrong, but if it's close to the truth then (yet another) sub-contractor needs his bottom kicked.
Yep, me again. However, the main point here is that the test flowed gas and condensate to surface.
At the same AGM in June 08 where those Q's were A'd, Soco described TGD as something that appears to be a very significant asset for the Group.
That wasn't all, though. DST2 was hampered by limited of the perforations, which had to penetrate two casing strings and associated cementing. Again, the problems encountered during both the drilling and testing of the well affected its ability to flow and there were no meaningful sustainable flow rates.
Designing for the future
Soco now have a lot more data to work with - not just in terms of the well itself, but also where to site it. The re-processing of the seismic will have used data from the previous TGD holes as calibration and that, alomng with some refinements in the model, should mean that they can aim at a part of the structure that seems likely to give some sound results.
Sitting thousands of miles of way with about 0.001% of the data available, I imagine that the real challenge for drilling is not the pressure per se, more the likelihood that there is a severe change in pressure gradient below the volcanics. Constant pressure gradients mean that a conventional mud column can be designed to hold back pressure from the well without causing too much invasion of the pore space. As soon as there is a change in gradient, then the mud has to be weighted up to deal with the higher pressures, meaning that the (always consistent) pressure gradient of the mud column causes invasion higher up in the hole, damaging the well.
I would guess that this means that they will deal with the well in two bites, the first down to the volcanics layer, where the well will be logged - and generously I hope - formation testers, fluid sampling, the whole works. They will then run casing to seal off the upper zone (without cocking-up the cement job) before drilling ahead in the lower zone before running another equally-generous wireline programme.
Once that's done, they can move on to the excitement of testing and finally give us some proper answers about this blessed structure...
I'd quite like to be there for the last few days of drilling and logging; if everyone can get their act together I really do believe that this is going to be a company-maker...
SW10
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SOCO International plc is an international oil and gas exploration and production company. The Company has oil and gas interests in Vietnam, which includes Block 9-2 and Block 16-1; Republic of Congo (Brazzaville), which includes Marine XI Block and Marine XIV Block, the Democratic Republic of Congo (Kinshasa), consists of Nganzi block and Block V and Angola, which include Cabinda Onshore North Block. The Company's operations are located in South East Asia and Africa. It holds its interests in the Republic of Congo (Brazzaville), through its 85%-owned subsidiary, SOCO Exploration and Production Congo SA (SOCO EPC). It holds its interests in the Democratic Republic of Congo (Kinshasa) through its 85%-owned subsidiary SOCO Exploration and Production DRC Sprl. Te Giac Trang (TGT) field’s Phase I production began on August 22, 2011. Total production net to its working interest from continuing operations, during the year ended December 31, 2011, were 5,437 barrels of oil equivalent per day. more »
442 Posts on this Thread show/hide all
In reply to ExTownie, post #101
Not very prevalent nowadays, but flaring diesel has been known as a practice in some quarters...
Actually, your leaks are more likely to come from onboard in these days of near-universal communication. In the good old days, the radio-room had a monopoly on comms and, even once ashore, getting news out or making buys was often more hassle than it was worth.
SW10
Thanks for the replies. I am very pleased to be wrong about the price action on Friday.
I had thought flaring was widely used during testing, but then I did study this subject many years ago. Presumably they have improved storage facilities on drilling platforms if they can avoid flaring?
Cheers.
ET
In reply to ExTownie, post #104
You're quite right. I can see now that my phrasing was appalling - I meant that flaring diesel is not very common nowadays.
Sorry :-/
SW10
Timewise if we were told 21 days on the 31st august, we are talking about nowish I would guess is that correct or is the info I've quoted incorrect.
A bad sign then that the share price is falling, but it could just be noise I agree,
has anyone heard anything re timings or if there are any delays ?
K
They said testing would take 3 weeks, but testing hadn't actually started when the RNS came out, so all we can do is wait :-)
In reply to stepone, post #107
News just out:
So the questions have to be:
Under what scenario's would temperature be higher than expected?
What impact would this have on the prospectivity of the resource?
Based on the price action at SIA, this certainly seems to be their leakiest well.
In reply to shanklin100, post #110
If anyone knew on Friday that testing was to be extended and more equipment sought, and sold on the back of it, then it won't have done them very much good.
My non-technical take on the good questions that jonnyt asks is that I think these delays may be termed a "quality problem" to have.
ee
ee
Agree with your post 110.
Cheers, Martin
P.S. The red one against post 111 is nothing to with me
In reply to emptyend, post #108
This one has been tough since the beginning, as per July RNS
'With the difficulties encountered in the prior TGD drilling campaign and with safety being the paramount concern, this well has been designed with a very fundamental "belt and braces" approach.
Hi ee,
It is a problem, and it could well be a nice problem to have, but with the time constraints and the likely consequences if they can't get this well to flow, the downside increased substantially this afternoon.The upside is now higher ..........but so are the risks.
Anyone thinking otherwise should read the excellent header again.
I've reduced a bit,
repobear
Why has the downside increased substantially this afternoon?
I'd say the opposite. A big risk was the cement job, looks to me that it's worked and casing is intact as is the well bore.
HPHT wells are well understood these days.
In my view the chances of a successful flow test have increased since the last RNS and I'll be behaving accordingly..
In reply to emptyend, post #108
I thought the previous drilling of TGD has already determined it was a HTHP field so why wasn't the equipment spec'ed to handle the high temperatures? I don't know if SIA are still operators but they should have some input in this.
I haven't sold but tempted to reduce considering I'm holding quite a large amount in consideration to my portfolio...if the price does rise in the next two weeks I might top slice a few..
jonnyt,
I am not that technically minded but I remember the delays and needs for extra equipment the last time and we know what happened then.
My biggest fear with this investment is arerun and loss of the license.
I'm not going to pretend that can't happen.
repobear
In reply to uncommon13, post #116
Yes - I really cannot understand why there should be equipment issues this time, given that the temperature and pressure environments were pretty well known after the last well. Of course this well ISN'T targeting the REALLY HPHT section which is below the volcanics - but they were still expected 8-9,000psi, I believe.
Then again, perhaps this is an issue which is more complex than it might at first appear. I'd be interested in SW10's comments in due course.
ee
Funnily enough, I was going to respond to stepone's post with a prediction of an eleven-day delay, but decided to carry on earning a living instead!
It seems a bit strange that this should happen on an "over-engineered" well - unless, post-Macondo, it doesn't look quite as over-engineered as originally thought. In other words, previous safety factors might have been arbitrarily increased.
Whatever the reason, it seems from reading between the lines that more or different kit is needed and I think that will probably prove a bit tricky to source at short notice - even assuming it's on a nearby beach somewhere it will have to be shipped out which will take time. It's even more likely to be sitting in a hub such as Singapore, assuming it's in Asia at all...
Whilst it's not that great in terms of planning, especially given the previous experience, I don't think it bodes ill for the final result.
As ever though, find something else to occupy your minds in the meantime - remember that SW10's Law also applies to the two-week extension announced today!
SW10
In reply to SW10Chap, post #119
yes agreed SW10, but aren't we due a bit of luck on TGD ????
reading the header, that it was summer 2007 when we first went to an AGM to be told that drilling had stopped on DEEP E, because of high pressure, over 3 years later and many 10's M $ later, we now don't have the equipment to test the high pressure zone on the "relatively straightforward" above the volcanics well.
Not holding my breath, but surely we can get a result this time,
K
Have to say I'm with the bemused mob here. How on earth weren't we prepared for this given the much commented "over engineering" that went into planning the well?
Can't see that it means anything particularly negative but doesn't improve my mood.
Bah - time for a beer.
I does beggar belief that this was missed/spares(choice) not available on site for whatever the reason.
Some possibilities:
Regards,
FH