No rate reduction is expected from the eight wells over their life as the Madison has an “infinite” water resource which maintains the reservoir pressure. (A well was drilled at the Grieve field to the Madison formation at Grieve to source water to re-pressure the oil bearing Muddy formation as part of the Grieve EOR project – it has supplied 11.4 million barrels for the Grieve re-pressuring operation at rates that exceeded 18,000 BWPD). The Madison gas wells at Madden towards the end of their life, will start to cone water as the gas water interface advances closer to the lower perforations in the wells and after plugging off lower perforations, ultimately will be shut-in when water production gets excessive.
Column 1
Column 2
Column 3
Column 4
0
Well
First Production
Lowest Perf. (ft. subsea)
Top to Bottom Perf. (ft)
1
Big Horn 1-5
Mar-95
-18,394
144
2
Big Horn 2-3
Mar-95
-18,381
273
3
Big Horn 4-36
Dec-98
-19,051
260
4
Big Horn 5-6
Aug-00
-19,267
234
5
Big Horn 7-34
Sep-02
-19,047
260
6
Big Horn 8-35
Aug-02
-19,211
250
7
Big Horn 9-4
Nov-03
-18,649
60 ?
8
Big Horn 10-5
Nov-09
-18,736
240
As can be seen from the table, the wells with the deepest perforations (and can be expected to see water first) namely Big Horn 5-6 and 8-35 are still producing at healthy gas rates which at worst, means there is still more than 1,000’ of gas column available for future production from these and the higher wells! The Madison at Madden is big and after 20 years of production, is still big!
Any rate reduction that has occurred in the history of the wells appears to be related to the re-distribution of production as new wells have been drilled and placed on line or change in sales gas contracted volumes rather than any significant production decline.
The cumulative production achieved to date from each Madison well represents a very desirable outcome relative to most Australian onshore gas field discoveries which require numerous development wells. The Madden field and its Madison formation is extremely large compared to any Australian onshore gas discovery. No Australian onshore gas well can or has matched the sustained Madison deliverability. The deliverability of the Madison wells and the existing processing plant capacities and sales contracts, together with the remaining Madden gas reserves mean that Elk should enjoy revenue from its 20+ MMSCFD Madden production for another 20+ years (i.e. similar to the lives being achieved by Bass Strait and NWS gas fields). Repeat Performance Part 4 post follows Newblood
ELK Price at posting:
7.6¢ Sentiment: Buy Disclosure: Held
