Petromanas Energy is drilling one of the most highly anticipated oil wells in the world today, the Molisht-1 well in Albania, which has the potential to transform the Calgary-based junior oil company, if good results hit the market in Q3 of 2014.
Backed by noted resource financier and philanthropist, Frank Giustra, and partnered with energy super major, Royal Dutch Shell, Petromanas is targeting light oil in deep tanks on shore in Albania.
In November, 2013 the company announced that their first well, Shpirag-2, made a discovery, despite complications with the well bore during drilling.
A second well not far away, Molisht-1, is drilling currently and has caught quite a bit of attention.
Oil and Gas Investments Bulletin editor Keith Schaefer wrote on Feb 24, 2014 that if Molisht-1 flows at commercial rates and the company has further exploration success, shares in Petromanas Energy could climb by 20 fold or more.
The company hosted a site visit in Albania last month for Mr. Schaefer, US Global Investors CEO Frank Holmes, Casey Research founder Doug Casey, Casey Energy Report editor Marin Katusa, and other investors.
Mr. Katusa spoke with Petromanas Energy CEO Glenn McNamara last week by Skype and has published the interview on Youtube.
Mr. McNamara started by explaining the learning curve for drilling in Albania which has contributed to its second well so far having no difficulties.
"We have a shale zone above the reservoir that can be from anywhere from 800 to 1200 metres that is fairly unstable. It is a necessary zone, it's our seal for this play. It's what traps the oil in this structure, the carbonate structure that's beneath what we're targeting, but it tends to be quite unstable in terms of flaking and we had the well cave in on us three times on the last one and since then we've learned a number of things and of course you have to appreciate there's a bit of trial and error, but we've worked with the mud system. We're using heavier mud then we did the last time."
"We got a lot of our information from talking to the folks in Italy. ENI's operating there quite a few wells and they have a similar flysch zone that they're dealing with. So we changed the mud system, we changed the downhole drilling, we tried not to rotate and so we're drilling with downhole motors and not disturbing the flysch. We're doing continuous wafer trips, which means we drill a bit and then we come out and clean the hole repetitively, more often than we normally do it."
"We also have a tool on surface … that allows us to continuously circulate. So the idea here is to keep that hole as clean as you can. We are also monitoring our cuttings on surface. So we know at any given point in time if there's any excess cuttings coming up the hole. So with all of those factors, we've been able to monitor this well much closer. We drilled a little bit slower than we did on the last one, but as you said, so far we've had no sign of problems."
The conversation turned to the diameter of the well bore which had to be reduced on the first well, thus restricting flow rates. The follow up well, Molisht-1, will be much larger in diameter.
"Well that was another learning from the last well. We designed it more like a well we have in North America and didn't build in sufficient contingency. The larger casing that you start with gives you ... more casing sizes to deal with as you go down the hole. So we went up one more casing string and started with a 30 inch hole, went down to a 24", then an 18", and now 13 and 7/8."
"What that allows us is more flexibility if we run into problems running down the hole to case off unstable zones. This gives us the opportunity to get to the reservoir with an 8 inch hole if everything goes fine. So more casing strings means more flexibility in terms of controlling the stability of a hole and when we set casings."
The interviewer asked Mr. McNamara how deep the Molisht-1 well is currently, to which the CEO responded to wait for a pending update from the company with this material information. McNamara added, "We're pretty pleased with how the well has gone so far."
Mr. McNamara provided a results timeframe for the Molisht-1 well.
"We're hoping to TD near the end of second quarter and then test the well sometime in the third quarter. As you appreciate, we TD'd the well to complete it with the rig and move the rig off to another location. Then we mobilize all the testing equipment and all of that does take some time. You know, four to five weeks depending on where the equipment is coming from. So it will be sometime in the third quarter when we'll test the well."
Petromanas hopes to encounter a lot of rock fractures in deep drilling, its CEO explained.
"One of the benefits of our current play is that we see the rock that we're drilling 5,000 metres down has outcropped on surface. So this is quite tight rock, it's carbonate on surface and down 5,000 metres and porosities and permeabilities are quite low. So to get the flow rates that we need with this type of reservoir, we need natural fractures. So we're looking for areas where the rock has been thrusted up and naturally busted and cracked up, it gives us these fractures and what we need to understand is what is the orientation of these fractures. Then we can drill against that orientation and try and intersect as many fractures as possible."
"The more fractures we intersect with a deviated well bore, the better chance we have getting optimum or maximal rates. So on surface we can see these fractures that have outcropped in the mountains and we get to see what their orientation is, their direction, the amount of fracturing… We have a reservoir consultant who's working with us, who's done a lot of work in Italy, helping us understand what is the best orientation and what's the best deviation to drill this well at."
"So the fractures are key to our deliverability and understanding those fractures is obviously important in terms of placing the well bore."
After a brief discussion on the new interest in Albania from other international oil firms, Mr. McNamara provided the interviewer with his expectations for the future of Petromanas Energy.
"Having Albania still our core business and we're very focused on that and we need to get our results. You're right, we have this well to go down and one more with Shell carrying us. After that, we'll see what the commitments will be and what the development will be. We also have acreage in France that we very much like. We are doing a resource assessment there and renewing our permits. We have a gas opportunity in the South of France that looks very exciting. There's lots of infrastructure there and we have some acreage in Australia that we're looking to do something with. So after Albania, there are some other things for us, but Albania is our key focus right now."
More: Petromanas Energy Corporate Presentation
Forward-Looking Statements: This article includes certain "forward-looking information" within the meaning of Canadian securities legislation. Forward-looking statements include predictions, projections and forecasts and are often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "forecast", "expect", "potential", "project", "target", "schedule", budget" and "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions and includes the negatives thereof. All statements other than statements of historical fact included in this release, including, without limitation, statements regarding the potential of the Company's properties are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are based on a number of material factors and assumptions. Important factors that could cause actual results to differ materially from Company's expectations include actual exploration results, changes in project parameters as plans continue to be refined, future metal prices, availability of capital and financing on acceptable terms, general economic, market or business conditions, uninsured risks, regulatory changes, delays or inability to receive required approvals, and other exploration or other risks detailed herein and from time to time in the filings made by the Company with securities regulators. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ from those described in forward-looking statements, there may be other factors that cause such actions, events or results to differ materially from those anticipated. There can be no assurance that forward-looking statements will prove to be accurate and accordingly readers are cautioned not to place undue reliance on forward-looking statements which speak only as of the date of this article. The Company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Disclaimer: Author holds a long position in Petromanas Energy. This article is not intended to meet your specific individual investment needs and it is not tailored to your personal financial situation. Nothing contained herein constitutes, is intended, or deemed to be — either implied or otherwise — investment advice. While the information herein is believed to be accurate and reliable it is not guaranteed or implied to be so. The information herein may not be complete or correct; it is provided in good faith but without any legal responsibility or obligation to provide future updates. Neither Tommy Humphreys, nor anyone else, accepts any responsibility, or assumes any liability, whatsoever, for any direct, indirect or consequential loss arising from the use of the information in this article.
