Continental Focus, International Reach

Sound Updates Tendrara

Tuesday, February 19, 2019

Sound Energy announced on January 7 that the FMI (high definition formation micro-imager log), which provides a micro resistivity image of the well bore at a much finer resolution than the initial logging suite, had potentially identified the presence of additional thin-bedded net pay within the previously identified potential gross reservoir interval between a measured depth (MD) of 1,899 meters and 2,009 meters MD.

The company recently commissioned the independent consultancy ERCE to undertake a petrophysical analysis of the gross reservoir interval encountered in TE-10. The analysis integrates a preliminary sample subset of the 57 side wall core samples with the wireline log data, including the FMI data and the high-resolution density logs.

Based on the results of this analysis Sound has made an upward revision of the previously announced net pay estimates, from up to 10.5 meters to up to 15.4 meters (a 47% increase), with a mid-case of 13.1 meters and a low case of 9.5 meters. This net pay is distributed throughout the 110 meters gross reservoir interval identified. The objective of the previously announced mechanical stimulation testing program will be to access this distributed pay.

Sound said it has recognized the presence of a fracture network in both the FMI data and side wall cores. The potential for a positive impact of this fracture network on the net pay calculation was not included in the scope of the petrophysical analysis undertaken by ERCE but will be considered once the well has been tested.

Previously confirmed gas shows observed during drilling, led to the calculation that net pay extends below the newly mapped structural closure at approximately 1,943 meters MD (updated from 1,958 meters MD communicated on January 28). These observations suggest that the gas accumulation most likely extends up-dip into the North East Lakbir structural-stratigraphic trap.

Following the latest seismic mapping, modelling and net pay analysis, the company has now estimated the gas resources discovered by TE-10 across both the structural and stratigraphic trapping geometries.

The North East Lakbir structural-stratigraphic closure has been assessed with a mid-case potential on a gross (100%) basis of 1,430 Bcf gas originally in place (‘GOIP’) with a 3,408 Bcf GOIP upside case and a 584 Bcf GOIP low case.  As is always the case with new discoveries, a further reduction in this range of volume uncertainty will require appraisal drilling. The volume range in the structural closure alone has been assessed with a mid-case potential on a gross (100%) basis of 81 Bcf GOIP, 170 Bcf GOIP upside case and a 30 Bcf GOIP low case.  Whilst these structural closure volumes have already been demonstrated by the TE-10 well, a successful well test is always required to confirm reservoir deliverability and commerciality.

James Parsons, CEO, commented: “We set out last year to deliver an ambitious three well exploration program to further unlock the Tendrara Basin and our second well (TE-10) is a discovery. Following our initial post drill technical analysis, we are delighted to materially upgrade our net pay and provide confirmation of the multi Tcf potential of this well.  We now look forward to addressing reservoir deliverability and hence commerciality with the well test.”

As announced near the end of January, the testing and stimulation equipment has been mobilized from Libya and Tunisia.  The Company has decided to utilize heavy duty perforating guns to maximize the gas flow rate and extra equipment has now been mobilized from the USA.  The Company is expecting the equipment to arrive on location and be rigged up and be ready to commence the test program within four weeks.  From mid-March, a series of unstimulated flow tests will be conducted on multiple intervals between 1,899 meters MD and 2,070 meters MD to establish the presence of deepest moveable gas.  Stimulated production flow tests will then follow in late March, over the most prospective reservoir zones, and are expected to take at least 30 days. Sound expects the initial post stimulation flow rate around end March.