>I would appreciate your take on the steam's impact on the Foldeak and how it could possibly impact Exxon's decision to maybe go forward with Phase 2 if you would care to take a shot at it.

The water would certainly turn into steam as the pressure dropped as it moved up the well. The pressure at the bottom would have been in excess of 1000 psi, and at 1000 psi, the boiling point of water is about 280 deg C. So at the bottom of the well, the water would still be water :)

Water certainly has an effect on gas flow. In the warro well for example, they had a period of several hours of no water flow, and the gas flow was about 5 mmcf/day. After the water started entering the well at a rate of about 500 barrels / day, the gas rate reduced to less than half. I think it's safe to assume that 3000 barrels a day would reduce the gas rate a substantial amount more than that.

Just like in the warro field, I think Exxon most likely targetted the natural fractures. Those fractures ended up being filled with water, so in the future they will have to avoid them.

I'm assuming that until they drill a lot more wells and have a better understanding of the geology, it's probably very difficult to tell the difference between water and gas when it's 4 km deep.

As for the results of the Foldeak, they did get 200,000 cubic feet per day out of the first frac. That doesnt sound like much, but we don't know how big the frac was.

"It is harder to extract gas in the Piceance Basin compared with other areas because it is trapped between isolated layers of rock, often within 20 feet of one another. Companies often fracture dozens of layers in a well in order to extract the maximum amount of gas."

There were only 4 fracs originally planned for the F-1, but we don't know if that was because there were only 4 potential zones, or because there wasn't enough money to do any more than that.