The world's largest oilfield services provider,
Schlumberger Limited
(
SLB
), has been contracted by Poltava Petroleum Company - a wholly
owned subsidiary of UK-listed JKX Oil & Gas - for multi-stage
fracture stimulation intended for a well in Ukraine.
The R103 well situated in the Rudenkovskoye license, Poltava, was
initially drilled in 2010. Located in the Devonian sandstone unit,
the well was spud to a total depth of 4,589 meters and comprised a
sub-horizontal portion of 1,000 meters.
A multi-stage fracture treatment was proposed by the team, which
carried out thorough geological and engineering studies of the
well.
In 2011, Schlumberger won a bid to design the R103 multi-stage
frac. Later, the company's divisions inked several other contracts
(including the newest one) for the procurement of chemicals,
materials, equipment and services required to execute the
nine-stage frac program.
The pre-frac arrangements on R103, involving the replacement of the
liner, were well underway, while the injectivity test was scheduled
for completion in the third quarter of 2012. A large part of the
fracking has however been planned for the second quarter of 2013.
This is due to the intricacies involved in sourcing complex
logistics and employment of long-lead items into Ukraine. The
unfavorable climatic condition of the winters in Ukraine could
further delay the commencement of the frac program.
We believe Schlumberger's combination of technological leadership
and management depth will prove beneficial for JKX Oil & Gas
over the long term, boosting the company's reputation. This will
eventually improve JKX Oil & Gas' long-term revenue and profit.
Schlumberger, which ranks ahead of
Halliburton Company
(
HAL
) as the biggest member of the oilfield services contingent, holds
a Zacks #3 Rank, which is equivalent to a Hold rating for a period
of one to three months. Longer term, we maintain a Neutral
recommendation on the stock.
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