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Grand Gulf Energy Limited (ASX:GGE) Dugas and Leblanc Drilling Update

Dugas & Leblanc #3
Drilling Update

 
Napoleonville-Dugas & Leblanc #3 Well, Assumption Parish, Louisiana, Non Operator 39.5% WI
 
The Dugas & Leblanc #3 well spudded on 16 April 2011 and reached TVD of 8,000ft (TD 8,920ft) on Saturday, 30 April 2011.
 
The Operator has advised that they have been unable to free the pipe and are attempting to wash the remaining pipe and push it to the bottom of the hole. Prior to side tracking one final attempt to free the pipe will be made. It is expected that the sidetrack will commence at 8,000ft to redrill the remaining 920ft. This exercise is expected to take approximately 3 days.
 
The well passed through 4 gas shows on the mud logs. Three of the shows appear to tie with the “M”, “N” and “O” sands with a further unexpected show in what is a potential new reservoir “S” sand.
 
The Dugas & Leblanc #3 well is updip of the #2 well and has intercepted the M, N, Stray and O sands. When completed production will start at the lowest hydrocarbon saturated sand and as each zone depletes the zone above will be completed. The expectation is that the D&L #3 well will be a gas well with the D&L #2 well recovering the oil in the “M” Sand. The D&L #2 well is currently producing in the “N” sand. Once this production depletes the 41ft of net pay in the “M” sand will be completed for production.
 
The potential oil recoverable from the Dugas & Leblanc field is estimated at 7 BCF and 305,000 BBLS and will be recoverable over intervals contained in a table in the ASX announcement.
 
In D&L #2 the “N” Sand has proven to exhibit strong water drive. However, the dominant drive mechanism in the remaining sands is an unknown variable.
 
The high permeability and porosity of the sands indicate potential flow rates of over 4,000 mcfgd in the D&L #3 well resulting in significant cash flow generation.
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