Case Studies
Oil and Gas Sands Test in St. Martin Parish, Louisiana
South Louisiana
Termo is partnering with Penta Resources of Lafayette, Louisiana in the Bull Moose Prospect to test the reserve potential of the Marg Tex 2, Stuart A and Bol Mex 2 sands. The well has a proposed TVD of 11,500’ and is located on the north flank of the Section 28 Field. In adjacent fault blocks are the Amoco St. Martin Land #9 and Stanolind St. Martin Land #5 wells. The Amoco #9 has produced 1.19
The proposed well will penetrate the Marg Tex sands up-dip from the apparent pay zone in the Amoco SML #20 well. In the up-thrown fault block, the Amoco SML #21 well is actively producing from the Marg Tex 2A sand. Downthrown on Fault T is the Amoco St. Martin Land #16 which is actively producing the Marg Tex 2A sand. In the fault block to the east and on strike, the Amoco St. Martin Land #7, #14 and #19 wells are productive in the Marg Tex 2 sand with cumulative production of 144 MBO and 208 MMCF.
Reserves Summary:
Two cases were run with three sands productive by virtue of the down-dip or adjacent production, a likely case with the Marg Tex 2 having 48 MBO, and 144 MMCF, the Stuart sand having 100 MBO and 250 MMCF and the Bol Mex 2 having 412 MBO and 889 MMCF for total potential reserves of 312 MBO and 639 MMCF. An upside reserve estimate calculated for all three sands is 544 MBO and 1,582 MMCF. The proposed 11,500’ well is estimated to cost $1.2 million dry hole or $2.4 million dry hole if a liner over the Het sand is required. The completed well would cost an additional $720,000 or $1.92 million for a completed well if the liner is not required.
Contacts:
Penta Resources – Jim Diehl – diehlland(at)aol.com
Lateral Pond Niobrara and Mowry Shale
Campbell County, Wyoming
Termo continues to study the potential for horizontal Niobrara and Mowry Shale development in our Lateral Pond project area near Gillette. With 15,000 gross acres in the project area, it has the potential to be a significant resource play for the company.
Our first attempt at producing from the Mowry was the Bishop #43-17 well, drilled in early 2010, and completed with a three stage ‘frac’ into the upper, mid, and lower portions of the zone. The first portion of the frac went off as planned, but the third stage did not work.
We have conducted some fairly extensive evaluation and diagnostic work on the well and it seems that the more data we get the more questions are raised. NuTech Energy Alliance of Houston conducted an extensive evaluation of the logs and the fracture stimulation. The evaluation tells us that we have approximately 100 feet of pay per shale zone, both contain significant volumes of oil and both have very low permeability. In addition, the frac impacted the Mowry interval to a distance of 250 feet from the well bore.
The bottom line from these studies is that oil is present but the ability to unlock it from the formation is the challenge before us at this time. We remain hopeful that we will find a way to access these reserves and make the Mowry a commercial venture. We have gone back to the drawing board and are ramping up our technical knowledge. We are also gaining knowledge by participating as a non-operator in another well in the area.
Based on other operator’s activities in the area, including Chesapeake, we remain confident that the secrets of the Niobrara and Mowry shale in this area will eventually be unlocked and we intend to be there when it happens.
Infill and Development Drilling Studies
Los Angeles Basin, California
Termo's review of the geologically complex area of the Aliso Canyon and Oat Mountain oil fields has resulted in the drilling of new wells over the past two years. Several pay zones were found in each well and are on production. Initial results have been very encouraging. New information from these wells is being incorporated into a geological interpretation to enable further development.
Termo is in the process of designing and permitting locations for up to 11 additional wells in these fields, including a new project area, North Aliso Canyon, for which we have begun the environmental study and review process. Permitting in Los Angeles County is a rigorous and time consuming process, and Termo has engaged the services of some of the best environmental and technical consultants in California to help us design and implement a sound and successful program for the area. We hope to begin drilling again in this area in the early winter of 2012.
Niobrara Shale Play, Mud Gulch Prospect, Sand Wash Basin
Moffat County, Colorado
Termo is currently seeking an additional partner to drill a horizontal Niobrara test well in the summer of 2012. We recently extended our leases on 2,500 acres in this area to ensure we have a foothold in this emerging resource play.
Shell, Quicksilver, and Axia are just some of the larger operators building sizeable positions around our lease block and testing the potential of the shale zone. Quicksilver in a spring 2011 news release announced that it had assembled almost 200,000 acres in the Sand Wash Basin and intends to drill six vertical test wells this summer.
According to E&P magazine, the Niobrara “remains a relatively unproven shale resource play in terms of its size and potential”(E&P Magazine, June 1, 2011 ‘Will Niobrara Turn Up Next Rockies Oil Boom’), but the interest by some of the smarter unconventional players in the business suggests that we will soon see this potential proven. Termo will continue to monitor the results of the other operators as we develop our plans for drilling this exciting play next summer.