Samson 50% Working Interest
The Company entered into a joint venture to acquire acreage in the Hawk Springs project area, located in the Denver-Julesburg Basin in Wyoming. The venture holds approximately 144,000 acres and covers two prospective formations.
The Niobrara formation, a fractured chalk reservoir, is the primary target for the project. There has been significant production from this formation in the Silo Field, which is approximately 30 miles to the south of the Hawk Springs area. The Silo Field, which is projected to recover around 10 mmstb of oil was discovered in 1982 but it was not until 1992, when horizontal drilling was applied to the field, that significant recoveries were made. Wells drilled using this technique have averaged a recovery of 230,000 bbls of oil compared with average recoveries of around 25,000 bbls for vertical wells.
During 2006, the initial well in the Hawk Springs Project, London Flats #1, was drilled as the first evaluation of the Niobrara. During the drilling of this well good mud log shows were recorded. However, upon completion of fracture stimulation, marginal fluid rates (of around 8 barrels of oil per day) were encountered and the well is in the process of being sold.
Management believes that the key to establishing an economic flow rate is therefore to determine the location of a fracture set within the extensive land holding that has been acquired. The approach that is being taken is to purchase the extensive 2D seismic data set that exists in the area, map this data and determine the regionally structural picture such that further seismic, possibly 3D, can be acquired to determine the location of a fracture set.
The Codell Sandstone formation is also productive in the Denver-Julesburg Basin. For, example, 30 mmstb of oil and 320 BCF of gas from that formation in the Wattenberg Field.
The Hawk Springs field is stratigraphically trapped. Similar geologic circumstances are present within the southwestern part of the project area where an isolated thick sequence of Codell Sandstone has been mapped using existing well control and therefore has the potential to generate a trap. While vintage exploration wells have penetrated this sequence and returned significant oil and gas shows, no commercial flow was established. However it has been the case that the early drilling and completion of the Wattenberg Field in the Codell was not successful and it was only in the very late 1990’s that fracture stimulation technology enabled it to be exploited commercially. We believe that this trap has the potential to recover between 95 and 140 mmboe.
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