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Shirley #1 Callahan County, Texas

03-23-04 Depth: 2948’; Shale & Sand; Drlg @ 2  min/ft.;  Drld. 638 ft. last 24 hrs.; Bit #2; Deviation: 1 deg. @ 2372’; Deviation: ¼ deg. @ 2841’; Bit Wt.- 32,000#;  RPM  -  70;  Pump Press. – 750#;  Mud Wt.: 9.1  #/gal; Visc:   44 :  Water Loss:  Water   ;   Drlg. Ahead.
3/23/4  We encountered the 2900' Strawn Sand as expected last night.  Good oil show, nice gas kick. 

3/24/04  We had a good drilling break (app 20') in the Strawn, as hoped.  Also caught a break in the Caddo last night.  Good natural gas 'kick', good samples, etc.  Known to be wet in the area, but we are running about 6' high on structure.  Drilling for the Duffer next.  Anticipate TD (total depth) & logging this Friday(ish). 

03-24-04 Depth: 3358’; Shale & Sand; Drlg @ 1.5 min/ft.;  Drld. 410 ft. last 24 hrs.; Bit #2; Deviation: 1 deg. @ 3212’; Bit Wt.- 40,000#;  RPM  -  65;  Pump Press. – 750#;  Mud Wt.: 9.2  #/gal; Visc:  42 :  Water Loss:  10.3   ;   Drlg. Ahead.


03-25-04 Depth: 3600’; Shale & Sand; Drlg @ 4 min/ft.;  Drld. 242 ft. last 24 hrs.; Bit #3; Deviation: 1.25 deg. @ 3358’; Bit Wt.- 36,000#;  RPM  -  70;  Pump Press. – 775#;  Mud Wt.: 9.2  #/gal; Visc:  43 :  Water Loss:  10.2   ;   Drlg. Ahead.

03-26-04   Depth: 3858’; Shale & Sand; Drlg @ 1 min/ft.;  Drld. 258 ft. last 24 hrs.; Bit #3; Deviation: 1-¼  deg. @ 3585’; Bit Wt.- 40,000#;  RPM  -  70;  Pump Press. – 800#;  Mud Wt.: 9.4  #/gal; Visc:  43 :  Water Loss:  10 ;   Drlg. Ahead.

The well was logged late last night.  Both the Strawn & Duffer look quite good on the logs, but the Caddo appears to be wet.  Nevertheless, pipe was ordered and completing the well began.  Next week, Telesis will be getting copies of the logs, analysis, & bill for the completion in the mail to you.  Hopefully we will be 'shooting' the Duffer next week to see its pressures, etc.  Congratulations!  I will be in touch.

03-27-04 Depth: 4025’- TD; (Corrected) Ran 3995’ 4-1/2” production csg; cement w/ 80 sx of “C” light ¼# celaflake, 300 sx of “H” expanding w/3#  Gilsonite, plug down @ 1:00 p.m. WOC.

4/21/4 Telesis successfully perforated and acidized the Duffer Lime (app. 3808'-3829') yesterday.  The well was swabbed & started seeing gas after the 5th swab.  Continued swabbing till dry, all along having a nice gas flare.  Opened the well up today with over 500' of fluid in the hole. Swabbed it down & shut the well in.  Will leave the well shut in for a 72 hour test & then gauge the pressures, etc. for possible fracture stimulation.  To date, have not seen any formation water, just the "load water" that was used in acidizing it.  Will know more after we see what kind of pressures there is after this test, & if a frac job is required.

4/29/4  The Shirley well had 170 psi down-hole pressure after being shut it for several days.  There was several hundred feet of fluid in the hole, and it appears to be oil.  Would like more pressure, but oil can prevent the down-hole indicator to show us much pressure at this point.  Telesis plans to swab it down tomorrow and check the fluid entry to the well.  Then decide if stimulation will help.  If all indications, after swabbing, show depletion in the Duffer, we will set a cast iron plug & go up to the Strawn zone.
I will be in touch.

The workover rig was put in place today over the Shirley #1.  The well had 160 psi on the tubing & 260 psi on the casing, with 450' of oil in the well.  They are swabbing the well every 30 minutes to test the fluid entry into the well.  Telesis is discussing possible frac designs with several of the well service venders.  The lack of pressure is not as concerning with it being oil vs. natural gas.  Making the decision to stay with the Duffer or go up the hole to the Strawn has yet to be determined.   I will be in touch.

After spending the day swabbing on the well, Telesis has determined the Duffer Zone has experienced a great deal of depletion.  And rather then spending alot of time right now on the Duffer, they will set a bridge plug & come up to the Strawn.  We can always go back to the Duffer at a later time.  Perforation of the Strawn is planned for tomorrow morning.  I will be in touch.

5/12/4 Telesis acidized the Strawn today.  All went well... after several swabs the well kicked off & we got a lot of the barrels back from our 'load' from the acidizing,  with a nice gas flare!  Will check the shut-in pressures tomorrow to decide where to go next,  as in, possibly a frac job. 

5/12/4  Telesis performed an acid job on the Strawn zone in our Shirley #1 yesterday and all went well.  After several swabs the well kicked off and began unloading the load water from the acid job.  Shut-in the well for nightfall & today there was over 1500' fluid in the hole.  Swabbing all day today to clean the well up & had a gas flare throughout.  There is good fluid entry into the well and Telesis is working up a "fracture stimulation design" for the well.

5/15/04  Telesis has set a down hole bomb test in the well!  This is staged for a 72 hour build-up test to see what the bottom-hole pressure is.  If all goes well, then the next step is to fracture stimulate our Shirley.  I will be in touch.  Dick

Dear Working Interest Owners:
After running the 72 hour build-up test, the Strawn has app. 360 psi bottom-hole pressure.  It is obvious that the permeability of this area is quite good, which explains the relatively low pressures we are seeing.  However, Telesis is ordering a small nitrogen-foam fracture stimulation treatment to be done to the well.  The thinking is there is still hydorcarbons in place to produce commercially, even though the pressures are not like we would have wanted in the Strawn. 
Structurally, we are high (app. 15') to the AEN-Isenhower well that produced over 160 million cubic feet of gas & 28,000 barrels of oil that sits over 1500' to our south; and, structurally flat to the Pendragon-Isenhower that produced over a quarter billion cubic feet of gas & 2600 barrels of oil that is located approximately 1000' to our northwest.  Both of these wells were produced from the Strawn.
With today's prices, we need to see what our Shirley will give up.  There is also a shallow (above 700') zone that is behind pipe & we will attempt completion in it when the Strawn is completely depleted.
Thank you for your support and patience.  I will be in touch.
Dick Stinson

5/26/4  Telesis has lined up a fracture stimulation job on the Shirley #1 for early next week.  This work will be done in the Strawn (app. 2884'-2904') formation.  I will let you know how it goes after the flow-back.

  The Shirley #1 was successfully fracced yesterday.  After shutting it in for a few hours, began swabbing it back yesterday afternoon.  Had a good show of gas with 10% oil cut coming with the fluid.  Swabbed till there was about 200' of fluid in the hole and shut it in for the night.  This morning had over 350 psi (pounds per square inch) of pressure at the wellhead, & began to run rods and pump.  Looks like this Strawn well will be both oil & natural gas.  I will be in touch.  Dick

6/16/4  Telesis field personnel is out on the property this week setting the pump jack, tank battery, & other various surface equipment.  Jim Murphy is in negotiations with the natural gas purchasers in the immediate area for the best deal we can get.  Then subsequently, a line will need to be laid to that sale's line.  I will be in touch with you when production starts.  Dick

6/29/4  Thanks to the weather, we have had some more delays with getting our Shirley well hooked up.  As of last week, the Telesis field personnel were laying the gas line from our well to the sale's line & its meter.  Along with all of the surface equipment needed to produce; i.e.., pumpjack, tank battery, separator, etc.  If the weather will behave for a few days of drying, maybe we can get this well on line soon.  One can only imagine how muddy the property is...  I will be in touch.  Dick

7/10/4  Telesis got the well pumping Wednesday of this week.  There is still a lot of the frac fluid to retrieve, but the oil cut is climbing & is encouraging.  The natural gas samples have had nitrogen in the gas due to the frac job & needs to bleed that off before we can start selling the gas.   After the well cleans itself up, which might take another week to 10 days,  we can expect a stable rate of production. 

7/20/4  The well is continuing to 'clean-up'; that is, the frac/load water & the nitrogen. Telesis is changing out the sheave in the pumpjack to increase the speed of the pumping in order to move more fluid. 

8/6/4 Telesis reports they got a "passable" test on the last natural gas sample (less nitrogen).  After the surface equipment is set & in place, the well will begin producing for "the good guys"!  All indications are that that will happen before the end of August

9/4/4  Telesis reports we are hooked up, selling gas & pumping fluid (oil cut).  I will get actual numbers of the production in the coming weeks to you once the well cleans itself up.  Have a great holiday!

9/13/4  Current gauge report on our Shirley well is approximately 35,000 cubic feet of natural gas & 3-4 barrels of oil per day.  We are still producing the 'load' water & the overall production should rise as that diminishes.  It is a low pressure reservoir, so we must remain patient.

9/23/4  Production is still running about the same.  As the "load water" diminishes, the oil should come up.  We will probably produce that "load water" for another 30 days.  There is some thought to releasing the bridge plug & co-mingle both the Duffer & Strawn zones.  Also, there is a real shallow zone up the hole that was a very prolific producer in the area for many years & is behind pipe in our well.  Division Orders will be sent out shortly.

10/21/04  You should be in receipt of the Division Orders for this well.  If you haven't, please sign and return to the Telesis office.  Current production is 3-5 barrels of oil & 35,000 cubic feet of natural gas per day.  Telesis is continuing to work on the well & feels the production will climb.

1/30/8  Dick Stinson tells me that Telesis plans to complete the Shirley #1 in the Cook Sand when the offset wells, Shirley #2-6 are drilled!!  The Shirley #1 currently produces some oil and gas from a lower zone and, if successful, will commingle production from the two!!


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Rayco Consulting 2004