The shares right now are pretty well the same before we started the drilling,
so they are actually right now a very very good bargain because nothing has changed.
The six wells are still there. The six wells still have the reserves.
When you talk about a glitch, it's just normal production issues that you
have with a with a field. We're going to be re perforating three wells
and what that does is because the gas comes in at four to five to
six million, can be pete per day and it blows the water out.
So that'll produce like that for you know, two three, four months.
The Financial Survival Network now more than ever, the Financial Survival Network. Welcome.
This is Financial Survival Network. I'm your host, Kerry Lutts. We
are getting a much requested update firm sponsor, Trillion Energy. It's been a
rough patch in the oil and gas patch recently, but we're here with Trillion
Energy CEO Arthur hollerant Art. We've been talking for years now. I said
when I first found this company, it was the most undervalued company I ever
found in my forty plus years of investing. And now with the company trading
it close to one time's earnings. Try to find that. I still believe
that undervalued, underappreciated problems emerge. But business is all about solving problems.
What problems have hit you that you weren't didn't expect and what have you done
about them? Okay, well, thanks carry for having me on the talk
show. Here to us so I can explain some of it. Like you
say, the shares right now are pretty well the same before we started the
drilling, So they are actually right now a very very good bargain because nothing
has changed. The six wells are all there. The six wells still had
the reserves. When you talk about it glitch, it's just normal production issues
that you have with a with a field. So we have long, long,
directionally drilled wells and when you're producing the gas, you get some water
coming in and it causes water loading. It's not the flank migrating up and
then what happens is it's just the weight of the water. Now at the
PERF zones, we came up with a plan. We've also engaged and they
are engaged. They've already given us the first report of facility production engineering burn
from Calgary. And the short term fix is perforation, which we are doing
and which we put out a news release. We're going to be re perforating
three wells. And what that does is because the gas comes in at board
to five to six million per day and it blows the water out. So
that'll produce like that for you know, two, three, four months,
and the long term solution is to put a pump in the borehole to pump
the water so that the weight's not done. We have three alternatives. We're
just waiting for the arrival of the pumps and we're then we're going to be
doing a test study. That doesn't mean we're not going to turn those three
new perfect wells out. We're going to put the test well, the test
pump in another well without reperforating it to bring everything back. So there's really
no reason for the shares that go down the way they did in the last
few days. I know why they went down, and so the people should
know that I know, and nothing has changed. The production is still going
to be there. The market price comes and goes. My biggest opportunities I'm
still major position in trillion has come from mispricing and misunderstanding by the market.
That's normal. Heading back to the consultant, you brought in, they like
looked it and like you said, long directionally drilled wells prone to water seepage,
which makes complete sense. And this company brought in world authority in optimizing
gas fields and production. They figured this out like almost immediately, didn't they.
Yeah, so they what they've done is there's going to be three stages.
On the first stage, they just told us the issues, which we
knew some of the issues, but they pointed them out. The next stage
is they're going to show us the alternatives to you know, fix it.
And the third stage is to give us learnings to when we drill our new
wells. Right. So an example would be one of the first things they
pointed out, which we mentioned before, but was tubing size. We had
four and advts tubing and that was because we needed that size tubing to run
the borehol tractors to bring the perforations string to perthi zone. And then that's
too big. They say we should be down to like two and three eighths
inch tubing and that makes it more production can lift the water. And so
the learning for the next time is we're going to perforate all the zones all
at once. When we drill the well and then put the tune half or
two and three eight since tubing in, So they pointed that out. They
also were saying, with the smaller tubing, we can use velocity screen where
the gas just goes up and we don't need pumps and things like that.
So they've already looked at it already in a fair bit of detail, and
so anticipating I've seen the numbers. Production by year end should be netting what
to seven and a half a million cubic feet per day, that's trillion share
of the hole. And in addition, we've seen gas prices go up a
little bit in Turkey. Right, that's correct. How we're getting over twelve
dollars US now for our gas. And then, like you say, we
expect to just by re perforating these three wells and putting in them, the
water pumps will be up to about fifty million cubic feet per day one hundred
percent, so half of that would be ours. And the low hanging fruit
is just the perforating the three wells, and we will be doing that.
We get detractors because we needed attractors. Well, detractors will be there probably
next week, so we'll be perforating in about a week or ten days.
So this is happening right away, so we're going to see an immediate production
boost once the new perfs take place. That's correct. And there's also this
big rumbling people say money, money, money to do all the perforations.
Our percentage is the cost is about six hundred thousand to eight hundred thousand dollars.
And how it works is that TPEO is the operator. They do the
activity, they perforate, they send us in boys and then we have to
pay it in thirty days. So we already have gas production, right,
because everybody remembers a gas production is instant. The minute we perf the wells
run production. Right, they're connected. And then for next year you've got
the side tracks. I think there are five side tracks for next year.
So what you know now is obviously going to speed up the production of the
side tracks and avoid these issues. Yeah, that's correct. And the other
little part about it is when we're talking about the side tracks before, so
the existing borehold is there, and there's existing perforations, but they didn't recover
all the gas for one reason or another, and some of them is because
of the water loading and because they never used ESP pumps and so on.
So if we find out it works for our trial study because we're going to
try it an ESP or progressive cavity, then potentially we don't have to drill
all sidetracks. We can re enter the old boreholes and do nothing but hump
the water down and the gas will come back on. So that will be
way cheaper. That'll be like a couple of hundred thousand versus eight nine million
to drilling. It will. So, you know, the rumors are flying
and it basically the rumor is that TCF is not going to make it,
that you're going to go out of business. So look me in the eyes,
tell me that you're in this for the long haul, and that the
solvency the future of the company isn't in doubt. Yeah, that the company
is here and it's not it. There is no doubt in the future.
And you know, one of the things about business, I always say,
it's not about the money you manage to get, It's about how you manage
the money you do get right, And there is like right now, there's
no issues between now and early twenty twenty four. Sidetracks are drilled, they're
all producing optimally. What can production look like at that point? And I
understand it's an estimate at best, but you have a pretty good idea.
You know what your reserves are, you know what's in the ground there under
the water. Yeah, that's correct. And what we did was we just
use the legacy wells because they're identical. Some are not as good as good
as pay as we have. And so our exit for twenty twenty four or
in that ring should be about twenty four to twenty five million, could be
feet pretty one hundred percent, So alf of that is ours and that's being
middle of the road, and that's that's nearly double what you're expecting to end
twenty twenty three with. And hey, we don't know what the price of
that gas is going to be. Nobody knows that. I mean, just
to look at the traders in the United States, we had a recent breakout
in the price. Nobody was expecting it, but of course that's when it
happens. So just if we have the same price that we have now,
which is unlikely, it's going to be pretty much an eighty percent increase in
monthly revenues. Yeah, that's correct, And right now, there's doom and
gloom out there. Like you say, everybody saying that the TCF is not
going to be around, and like I say, that is in my opinion,
that is a group that's putting that news out there for certain reasons.
And I'm afraid to tell them or happy to tell them that TCP is going
to be around. Because we drill the wells, we have the gas there,
we're getting a good gas price, we have a way to solve the
issues we have. We're just going to execute it. And at the same
time, now our oil block that we're farming into is looking better and better
because I just asked for some information and it appears a TPAO, the government
company, has licensed about four more new expiration wells within a few if not
a kilometer from our blocks, and so those wells were probably drilled before we
actually drill our wells. So in what we used to do in Canada is
when we had an expiration block and somebody was going to drill right beside our
block, it was like getting a free look at what we had in our
block. And for that also, we're starting the seismic for the eastern over
the part that has the antikline, because we also have some surface mapping.
Now, any anti cline that has those large oil discoveries, both of them
trend and pass right through our barm and block, and so it's looking really
really good. How much are those other antikline fields nearby? And my understanding
is ones as close as ten kilometers? How much are they producing those fields?
So yeah, again the information is pretty tight, but I just got
an update here a few days ago. They have six six wells and they're
producing eighteen thousand together, eighteen thousand barrels oil per day, and you know
they produce over one thousand barrels each and they intend to just keep drilling.
They're just going to keep drilling. Pretty those are gushers, right, Yeah,
they're pretty good wells. Yeah, and that's thirty six and forty one
API, and you're pretty much very similar geology to what they've got there,
exactly the same geology. And for that eighteen thousand barrel oil pertage field that
anti cline is on surface mapping carries right through our profit and there's no seismic
on that block where that anti cline is, and know well, so it's
complete new growth. Okay, So once the earliest you think you'll be drilling
your first exploratory well. So that first exploratory well will be in June or
July of twenty twenty four. We'll have the seismic shot because we have to
shoot it before the winter. Before December. We'll have some rough I'll be
there looking at it, but it'll be processed, and the early processing we'll
be able to see, you know, in a the size and the location
or the geometry of that any client, and that will be a news release
all were putting out right away, and then by February March we'll have the
more refined mapping and then we'll set up to drill June July, and drilling
is two and a half million bucks. Yeah, the seismology, you were
doing the updated seismological study on SASB. Where is that at now? So
we finished the reprocessing. The mapping is going to be starting here. They're
now doing the calculations of the a VO, So some of the rough mapping
for the faults and stuff like that is occurring right now, and then in
about end of November they will start to map the AVO anomalies and so on,
so we should be start seeing some pretty good maps by January February.
And just one thing about seismology the way it is now when you drill for
oil or gas. It used to be, you know, you had a
guy with a divining rod, one edd of two out of every ten wells
would be good, ten would be dry holes dusters. Now nowadays it's the
opposite, right when when you drill, when you actually drill for oil or
gas, you're I didn't say, I don't want to say absolutely certain,
but you have a very good idea of what you are going to find when
you start drilling. Yeah, that's correct, especially on SASB because the way
the gas and the sands with the process, because they're such a good reservoir
that well, I'm not saying they're going to calculate. They calculated an anominate
thing and it's called av oh. And from the drilling, we know that
we can see the gas in the seismic and it has to be a certain
thickness and so on. But all the old pools that we drilled and the
new pools we drilled were based on the signature. And then you do a
color contrast and it becomes very hot and it is I mean, I said
one, I'm one hundred percent sure we'll get oil and gas, and then
Security Exchange pull me up and said, no, I can never say one
hundred percent. And that's a true, a true thing. So I am
as certain as I can be that there's gas there when you see it was
anomalies. Hey, And just to drive on the point that I trust to
your judgment. You're six for six, right, Yeah, that's correct.
Yeah. And also what people don't realize is that three of the wells that
we actually drilled were expiration wells. Right. So for Gulich two, there
was a Gulige South and that was a reserve well. We never drilled own
because we saw a better ABU signature what I'm talking about in the northern one,
which was the expiration block. And so when we drilled out when we
got seventy five meters of bay versus thirty five in the southern one. And
this souther one still exists, we never drilled it. It's proven because it
has a vertical well. And yes, so we're six for six. Yeah.
So when you say, when you drill, you're almost certainly going to
find oil or gas, I tend to believe you based upon your track record.
Unfortunately, the production lagged the drilling because of the issues you said,
but you know, it's all part of the learning process. And more importantly,
you're optimizing the production now and it's just a matter of the getting this,
doing the purfs, getting the pumps in place, if that's what you
decide to do. But by the end of the year, we're going to
see the production that we were expecting all along. That's correct. And when
we talk about the averages, you know, so when we perforate these three
wells, we will be at that year end production for the first month or
so, so it'll they'll come in very, very high. And then so
we will then start getting some good, good cash flowed from that. Okay,
So you know, it's always darkest before the light. As they say,
you know, the market is the market. We don't need to question
what its reasons are rationale. But my feeling is that in the end,
value wins out. And even more important and value is cash flow. When
the money's coming in, nobody can say that trillion's going to disappear, can
they? You know, that's correct. And again talking about the cash flow,
the cash flow for now, like for the expiration for the recompletion and
so on is not that much that what we need. The big cash is
way next year and we'll have these wells on producing and we will be banking
most of that money. So that's that's like way in the future. And
we already we still have the five million dollars worth of consumables that we purchased
for those side trucks. We still have that, so that's already paid for.
So you already paid for a substantial portion of this future drilling art.
I want to thank you for coming on. Thank you for you know,
looking me in the eye and telling me what's going on. You know,
I hope when the production's up, cash flows up, you'll come back on
and we can drink a glass of virtual champagne. Kiss twenty twenty three goodbye,
and look forward to twenty twenty four. Yeah, that's correct, and
in twenty twenty four we'll hit that big oil well. Go to the company
site trillion Energy dot com sign up for notifications. You know, the most
transparent, up to date reporting of any company I've ever seen. Ticker symbols
Canada tcf US new symbol t r l e ED. I'm still holding my
shares Bart, we'll talk to you in a couple of months hopefully. Okay,
thank you very much. The Financial Survival Network