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AJ Lucas Group - Initial flow test results

Cuadrilla has become the first operator to have flowed gas from a horizontal shale gas exploration well in the UK. Initial results are encouraging, with recovered gas containing very high methane content (96%), no H2S and minimal CO2. Core samples suggest the Bowland shale is quartz rich, with low clay content and excellent properties for fracturing. Gas flowed to the surface from PNR1-z at a peak rate of 0.2mmscfd, but with just two of 41 installed stages along the horizontal section fully fractured as designed. Less than 14% of sand planned for injection was put in place as Cuadrilla attempted to operate within the regulatory micro-seismic traffic light system. Cuadrilla estimates that a 2.5km horizontal well, with all stages fractured as planned, would have a potential initial production (IP) rate of 3–8mmscfd (no IP time period stated). Data were not provided on type curve or potential estimated ultimate gas recovery (EUR) given the limited duration of the test. EUR would be a key additional input when determining commerciality. In our initiation note published on 9 April 2018, we estimated a minimum commercial 30-day IP rate of 5mmscfd for a 2.5km lateral.