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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