Good Morning,
Extremely positive news out of Shoal Point Energy (SHP/SHPNF) this morning! The stock hit .28 yesterday before being halted to release news on their first well at Mount Evans in Kansas. Thankfully, it looks like our early stage bet is paying off!
Now, we do not know the flow rates of oil yet and likely won't until they complete production casing after a 10-14 day curating period on the cement. However, there are a few things that we can deduce from this news. First, you don't move forward with this step at all if you had a dry hole!
Second, "Analysis of logs and oil flow in drill stem tests indicates that several zones should be completed," said Mr. Jarvis." This is exciting, as "several" zones are producing oil. They had indicated there are 6 different formation zones that could produce in these early Mount Evans targets.
Third, they can't call this a "commercial producer" yet and had to be careful with language aka "attempt" because data isn't final. But, they wouldn't waste their money unless they felt highly confident that this well is going to be an economic producer. The only question is, how economic will it be?
Generally, these wells have paid back in 60 days!
Lastly, I spoke to CEO Mark Jarvis on the phone yesterday and one word came to me while speaking to him....giddy! I strongly doubt that he would be so enthused if preliminary data was just showing a few drops of oil.
So far so good from SHP.....
Production casing being installed in Mt. Evans well
2020-01-14 08:00 CT - News Release
Vancouver, British Columbia--(Newsfile Corp. - January 14, 2020) - Mark Jarvis, CEO of Shoal Point Energy Ltd. (CSE: SHP), announced today that production casing is being installed in the Company's first Mount Evans project well and that an attempt will be made to complete the well as a commercial producer.
"Analysis of logs and oil flow in drill stem tests indicates that several zones should be completed," said Mr. Jarvis. "The completion program is being designed now and we will move in to complete and equip the well after giving the cement 10 - 14 days to cure."
Shoal Point Energy has completed all earn-in requirements under the farm-in arrangement by drilling to target depth of 4,764 feet and all operations at Mount Evans from this point forward will be conducted as a joint venture with Shoal Point holding a 65% working interest and our partner holding the balance.
"This positive result is cause for cautious optimism about the entire Mount Evans project," said Mr. Jarvis. "Evaluation of this well and the addition of the data to our seismic and geological model will help in selecting locations for other wells in our acreage package. We are very impressed by the methodical, scientific approach taken by our partner's technical team and look forward to continued success working with them."
About Shoal Point Energy Ltd.
Shoal Point Energy Ltd. is a public company listed on the CSE exchange under the symbol "SHP". The company is focused on its Mount Evans project in Kansas and retains its oil and gas interests in the Humber Arm Allochthon play in western Newfoundland.
