Matrixx has signed a purchase agreement to acquire an additional eleven percent (11%) working interest for a total of a sixteen percent (16%) working interest in the Clovelly Prospect. 3D Seismic survey of the property has caused for a plan test of the "P" Sand at approximately 14,700 feet, and if successful, would expect significant reserves in the well to an anticipated 11 million barrels of oil.
The well was originally drilled by Grey Wolf under a turnkey contract with the operator to test the "M" at 13,500 feet. After not reaching the "M" sand at 13,500, the operator and its partners have agreed to continue to drill to approximately 14,200 feet to reach the "M" sand and to test the "P" sand. After drilling to 14,280 feet, we reached what is known as a stringer sand as well as a drilling break. A stringer sand is one that has evidence of oil in the sand. A "drilling break" is defined as encountering "reservoir quality sand" and pressure, in this case, gas was entering the well bore.
At that point the gas pressure could not be regulated properly; therefore, the well had to be plugged and abandoned for both safety and logistical reasons.
After carefully reviewing the available options, it had been determined to initiate several courses of action. Certain discoveries and findings while drilling the No. 2 well has caused drilling a "twin" hole to become a certain and viable option. A twin hole is described as drilling a well adjacent to an existing well, such as the No. 2 well. Additionally, for economical feasibility, it is planned to drill as soon as practicable, an additional well known as a PUD (Proven-Undeveloped) well up-structure to a target depth of 12,500. The PUD recoverable reserves are estimated at 250,000 barrels of oil with an upward potential of 500,000 barrels.
Drilling of the twin will take place to the expected "M" sand. The Company expects drilling of the twin to take place near the original well so that we may tap into the first gas discovery found; while, simultaneously at a distance as not to encounter unfavorable conditions as a result from the initial hole. This is done to maintain the integrity of the new drilling location.
The No. 2 well encountered a two foot gas discovery, but due to the location of the hole; the drilling may have occurred offset whereby an additional 28 feet of discovery may exist containing up to 5 BCFG (billion cubic feet of gas) valued at nearly $35 million. While the gas discovery might be considered as an added benefit, the intended cause of drilling the twin is primarily to target what is known as the "M" sand at or about 14,300 feet to 14,500 feet with a prospective size of 10 to 11 million barrels of oil.
Located 35 miles southwest of New Orleans in Lafourche Parish, the Clovelly Field is a late piercement salt dome that traps hydrocarbon from Late to Middle Miocene time. Since its discovery in 1950, the field has produced in excess of 30 MMBO (Million barrels of oil) and 200 BCFG (Billion cubic feet of gas). Reservoirs typically exhibit moderate water drives and benefit from water and/or gas injection. Stone Energy Corp. has redeveloped the eastern flank of the field with additional drilling and water injection. Similar opportunities exist here at Matrixx's proposed location.
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