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oil & gas discovery - must move price- options

  1. 162 Posts.
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    There is a big difference between Fracturing a Shale and a Fractured Shale
    Entek has just announced yet another flow of oil and gas from the Niobrara. So far they have flowed oil and gas from the 12-1 well, the 14-15 well, and most likely the 13-15 well. Based on their announcements each zone in the Niobrara does around 100 barrels of oil per day and 1 MMCF of gas per day. The Niobrara has 3 such zones all of which have been tested at these rates in the 12-1 and soon in the 14-15 which has already flowed oil to surface.
    The 14-15 well is located on the Slater Dome Structure and a previous announcement stated that if the well intersected oil and gas the structure could contain up to 5 Million barrels of oil and 60 BCF of gas. The 12-1 well area already has certified reserves of around 2.2 Million barrels and 7 BCF of gas. And these two wells sit at opposite ends of the acreage portfolio proving the play exists across a huge area.
    Based on their announcements and those of others the Niobrara Play looks better than most other shale plays. It is a Fracture Shale not a Shale that needs mechanical Fracturing like the current popular shale the Eagle Ford. Therefore the standard vertical well costs are only a quarter of those required for horizontal wells with fracture stimulation. Flow rates are as good and decline is not going to be as dramatic as with a horizontal. The Niobrara seems to contain more oil per unit area than the Eagle Ford as well. And Entek holds double the acreage of any other Australian Shale Player. Interesting.
    I expect after this years work program is complete these guys will release new reserves certifications and resource results. Based on the above these numbers are likely to be realistically more than 10 times what their peers have announced using the same methodology.
    It is amazing that this morning, after yesterdays fantastic announcement that the sell side is stacked. It appears that the underwriters of the options are doing a great job of holding down the price so that there is a large shortfall which they then collect at 20 cents.
    If you want information then ring the company as i have done.

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