WEYBURN, Saskatchewan – Stock price for Quagmire Energy surged after news of the Regina-based company’s new production optimization strategy hit the streets. The company is taking a new approach to flush production, as it attempts to develop its Montross field in a way that the production will always be in flush mode, where the highest production rates are typically realized.
According to the company, this will be accomplished by strategically shutting in and turning on wells throughout the field in a way that maintains high reservoir pressure and maximizes production rates.
Many E&P companies don’t budget for flush production, but rather forecast production after it has turned the corner when the rates are lower. But why ignore the flush production? That’d be like turning off a porno after the intro credits have rolled – you’re missing the good stuff. Flush production rates can sometimes be 2 or 3 times that of the rates seen after the reservoir’s boundaries have been seen.
Anyhow, here’s how it works: When a new well is drilled, we will let it produce until its rate drops to 90% of its initial (flush) rate, at which time we shut it in to let things pressure up – then we turn it on again, and voila, more flush production. Rinse and repeat. – Nancy Rickles, Chief Production Engineer, Quagmire Energy
Nancy continued on to claim that if this process is repeated for all of the wells in the field with staggered on times, then the entire field will only produce flush production. The junior company concedes, however, that average reservoir pressure throughout the pool will decline overall, but the production can still be classified as flush, so that’s what it will promote on its online investor brochure.
Many layman investors think the idea is great because they can expect higher returns from the higher production rates, but some energy analysts are not buying the technique.
Errr…. yeah…. umm… no… this is not going to work. Although the idea seems great on the surface to unedumacated investors, the simple fact is that the average pressure in the reservoir will drop far more quickly than expressed in the company’s investment brochure. And what does “way more reserves” mean anyhow? You’d think that they would quantify that to some degree – the last time I checked, “Way More Reserves” is not a COGEH certified reserves classification. I wouldn’t even put $10 toward stock in this company, because this scheme is a scam. – Tyrone Jackson from Bros & Fros Energy Advisors
According to a source close to the story, Perpetual Resources has filed a complaint to the AER, the SEM, and to the Alberta courts claiming that the name of Quagmire’s new optimization strategy is a trademark infringement on the Calgary-based company’s name. The AER has taken this matter very seriously, and the regulator plans to announce the creation of a brand new 200-employee division that will deal specifically with stupid names for oil companies.
Do you want to say who that was?
No, we don’t.
Hey! Tyrone Jackson is my identical twin brother from whom I was separated at birth (and never seen since)! Wow, this site is great. We provide top-shelf oil and gas news content, and we help reunite long lost family members.
What a great blog this is. Look forward to looking this again shortly.