March Resources Corp. announced that the zones identified for completion in the Pica #1 well have been perforated. Sixteen separate perforating intervals were picked in four different zones from various logs. The perforating intervals in each of the four zones were picked to evaluate gas shows and drilling breaks in porous sections of rock in the Cerro Empexa and Guatacondo Formations. It is believed that all gas in these formations has been sourced from the black shales of the underlying Majala Formation.
Due to a limited availability of completion equipment in Northern Chile, perforating operations were carried out with a wireline truck only. Each perforating interval was shot underbalanced and no plugs were run between perforating runs to isolate each zone. As a result, all zones are commingled and it is currently not possible to determine which intervals may have contributed to an increase in wellhead pressures observed during the perforating operations.
The perforating operations were conducted over three days in the four different zones identified in the well.
Zone #4 (from 2000 meters to total depth)
Two intervals were perforated. There was no pressure increase at the wellhead and no gas flowed to surface. This was expected as the background gas readings recorded in this zone during drilling operations were very low.
Zone #3 (from 1500 meters to approximately 1800 meters)
Nine intervals were perforated. Gas flowed to surface from each of the first four intervals perforated but the wellhead pressure was too small to measure. Gas continued to flow to surface from the next three intervals perforated and a small increase in surface pressure was measured, increasing as each one of these intervals was perforated. By the end of day #2 of the perforating operations the surface pressure had increased to 210 KPa. The well was shut in over night and the surface pressure over this next twelve hour period increased to 760 KPa, providing a strong indication of gas flow into the wellbore during the night.
Zone #2 (from the top of the Guatacondo Formation at 1350 meters to a depth of 1475 meters)
Two intervals were perforated. Gas continued to flow to surface throughout this operation. However, wellhead pressures started to decrease.
Zone #1 (from 1040 meters to 1150 meters)
Three intervals were perforated. Gas continued to flow to surface. However, the wellhead pressure dropped to approximately 450 KPa by the end of the perforating operations.
The last perforating tools pulled from the wellbore contained fluid. As a result, it is suspected that one or more of these zones may be wet and may be loading up the well with fluids, thereby limiting one or all of the potentially gas bearing zones from flowing. It is currently unknown if these fluids are from the reservoir or the drilling operations.
Once perforating operations were complete the well was allowed to build up overnight. Over approximately 12 hours it built up to a wellhead pressure of 485 KPa. An attempt was made to flow the well but it was only capable of flowing for a short period of time. Currently the well is shut in to build up sufficient well head pressure to obtain a gas sample for analysis.
Additional equipment will be mobilized to confirm if there is fluid in the wellbore and to determine which interval or intervals this fluid might be producing from. In addition, March will attempt to establish gas flow from the intervals where definitive pressure increases were observed.
The low wellhead pressures observed throughout the perforating operation and the assumed corresponding minimal in-flow of gas was due to the tight, low permeability rock that was perforated. March will proceed with the design of fracture stimulation programs for the more prospective intervals, in an attempt to stimulate these intervals to increase gas inflow.
March reiterates that these results do not represent the discovery of economically or technically viable reserves of any nature. However, March considers these results to date to be very encouraging in that any gas observed in any zones in the Cerro Empexa and Guatacondo Formations is believed to be sourced from the Majala Formation black shales. As a result, March plans to continue exploration for reservoir rock in communication with this source rock in Pica #2 and at a third location, which is currently being constructed.
Pica #2 Drilling Update
The Pica #2 location is currently drilling in the main hole section at a depth of approximately 1,450 meters in the sandy volcanic tuff of the Cerra Empexa Formation.
March has a 100% interest in both the Pica North and Pica South Blocks which in total cover 2.5 million acres.
Trading in the securities of the Corporation should be considered highly speculative.
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