If this natural fracture system in the Foldeak-1 well, which we now know is full of water, came as a complete surprise to Exxon, Falcon, and MOL, do you think Falcon would have said this:

"Falcon is currently evaluating the remainder of the Szolnok Formation to determine if it is possible to move away from this potential natural fracture system."

If you buy a bushel of apples, and the first one you bite into is bad, do you assume the entire bushel is bad, and then search through it to "see if it's possible" to find a good one?

Of course not. One would normally assume that the rest are still good, and it was just bad luck that you found a bad one on your first attempt.

That's why I find this sentence from the news release a little 'fishy'. It strongly suggests to me that they knew the fracture system was there, and that it exists throughout the Szolnok at the Foldeak-1 location. Natural fractures are a very good thing, unless they happen to contain water!

I don't have a whole lot of hope for frac #3 on the F1. If I'm right, it would explain why Exxon didn't want continue work on that well. I do however believe they plan on sticking around for a few more years, and think the money would be better spent on drilling in a different location.


Most of us also remember Bruner saying that the first few wells would be in production by the end of 2006. Obviously that didn't work out, but that is not all that he said:

"I mean, frankly, the chance of, the good news is we found, you know, a whole lot of gas-saturated sands. The chances, frankly, of finding the best place in 575,000 acres is probably very, very low, so the way you find the best places is you drill wells, okay?"

"Certainly by the end of the year they should all three be into full production, and we will continue to drill step-out wells to try to find the sweet spots. My best guess is the exploitation phase will start in the next year after we have drilled some of these exploration wells and found and identified the best places to drill the exploitation wells"

(If I'm not mistaken, the plan at the time was to drill 17 more wells)

Fracing of the F-1 started on or about Sept 17th. On Sept 29th, Falcon was saying this at a conference in Budapest:

"The most prolific parts, called sweet spots, possess a reservoir potential higher than the average. The identification of these sweet spots constitutes one of the most important, and quite possibly the most challenging task of the entire exploration project."

So I think it's quite obvious that they have yet to find the sweet spots, and it will probably take a lot more wells to do so.

Falcon has stated that they think frac 3 & 4 might be a 'sweet spot', but they are referring to a 'sweet spot' within a particular formation at a particular site. I think they still need to locate a 'sweet spot' within the Mako Trough itself.

As for the Hod-1 and Mindszent-1, I don't think those wells were drilled in order to find sweet spots, or for testing flows. I think they were strickly delineation wells, drilled solely for the purpose of obtaining a production licenses.