Updated Newbie Summary-do your own due diligence-This will have a big positive impact on the Canadian Oil Sands
Columbia River Basin Multiple TCF's Natural Gas Potential
"We consider this play to be the highest potential natural gas resource play being evaluated in North America." First Albany August 22, 2006
Executive Summary
Target: Columbia River Basin ("CRB") Washington State - The largest unexplored onshore basin in the United States !!
Industry wisdom: Says the U.S. Pacific Northwest holds trillions of cubic feet of natural gas, waiting to be discovered and produced.
More: Experts have long believed a 125-mile-long and 60-mile-wide patch of land between the Columbia River and Wenatchee -- shaped like a massive footprint -- is rich in natural gas. So rich, in fact, its potential may be similar to the vast supplies of the Western Canadian Sedimentary Basin in Alberta and British Columbia.
Potential: 200 to 300 Trillion Cubic Feet or TCF of natural gas. Each TCF proved is worth approximately $ 1 to $2 Billion in market cap. The potential is substantial !! (since Delta Petroleum owns approximately 20% of the CRB area play and has a market cap of only $ 1 billion this play is significant to them) The ANNUAL United States usage of natural gas is about 23 Trillion Cubic Feet. You would think there would be more news.
Research report: Ross Smith (highly rated independent Canadian Research firm) on September 11, 2005 released a key report on the CRB that estimated 228 TRILLLION cubic feet of natural gas potential in the CRB. Delta has over 20% of the total CRB land acreage tied up. Eric Sprott has said each TCF is worth $ 2 billion of market cap..... ROSS SMITH ENERGY GROUP rseg.com
Players: Shell (been interested in area for 25 years-only recently has technology allowed feasible exploration), Encana and Delta Petroleum (DPTR-owns 20% of acreage in CRB). Another player is Essex EXX.v.
The key speech happened Thursday August 17, 2006 by Delta Petroleum (DPTR) CEO Roger Parker at the Enercom Gas & Oil Conference in Denver. On Friday, August 18, 2006 Mr. Parker hosted a analyst conference in Denver. Few are paying attention.
Comments from Various Sources:
Delta CEO Roger Parker said Wednesday at an annual oil and gas industry conference in Denver.August 17, 2006
"The main thing to say about the Columbia River Basin at this point in time, the geologic theory that we've all kind of operated under here for the last couple of years, and really was identified by Shell 25 years ago, has been confirmed, if you will, with another well," Parker said.
"We believe we have encountered what we had hoped to encounter prior to drilling the well and we will be very interested to see what actual completion results are as we go into the remaining part of this year."
"There are many different estimates out there, but the reality of the situation is this basin, in all likelihood, represents the possibility of being able to prove up in the tens of Tcfs (trillion cubic feet) reserves if not possibly in the hundreds of Tcfs reserves,"
August 22, 2006 First Albany Capital
"We consider this play to be the highest potential natural gas resource play being evaluated in North America."
"Two World-Class Prospects Expose Investors to $175 per share in Potential Asset Value; Initial Results Anticipated in Next 3-6 Months"
"In the CRB, the Anderville Farms 1-6 (7.5% WI) has been drilled and logged. At its analyst meeting, management described the log results as "better in some ways than anticipated." Completion is anticipated in the next 30-60 days. The second well in the basin, the Anderson 11-5 (7.5% WI) has spud, and Delta recently announced it has begun permitting two Delta-operated locations (100% WI). Delta's partners in the first phase of the play are EnCana and Shell (RDS-$72.03-Not Rated )."
"The CRB boasts the potential for a thicker pay section (1,000' versus 600' ) and better permeability (3 millidarcies versus 0.1) than the Pinedale and has similar pressures (0.8 psi). One of the original wells drilled in the basin in the early 1980s, the Shell BN 1-9, was completed in two sands that IP'd at 17 MMcfe/d and settled in at 5 MMcfe/d over an extended (62 days) production test. Other wells in the basin had mixed results, but the primary challenge was completing in multiple sands to increase production rates and unlock the economic potential of the rock. Delta and its partners believe the multi-stage completion technology that transformed the Pinedale into a world-class play could have similar effect in the CRB."
"A thick layer of basalt overlays the play from 8000-11,000'. The underlying sedimentary layers total 3000-9000'. Delta and its partner have been using a closed system "mining" rig to penetrate the basalt, which allows them to avoid circulation issues and mud flow into fresh water aquifers. Drilling on the first modern well in the basin, the EnCana-operated Anderville Farms 1-6 was challenging, but the second well has drilled twice as fast to date. Delta projects it should be able to drill at a rate of 200' a day through the basalt and 400' a day through the sediment for a total drilling time of 105 days on average (60 days through basalt and 45 days through sediment)."
August 21, 2006 Petrie Parkman
"With news on several key exploration projects likely in the next several months and a significant (13%) short position built, we believe DPTR shares have little downside risk and encourage investors to be in front of these potential catalysts."
"In our view, Delta holds the greatest leverage for investors wanting exposure to the Columbia River Basin play."
"In our view, Delta holds the greatest leverage for investors wanting exposure to the Columbia River Basin play. The company currently holds interest in six prospects with a 100% WI and five prospects with a 15% WI, with each prospect looking to test a separate geologic feature."
"The long-awaited Anderville Farms 1-6 (EnCana-operated) well is currently at total depth and is waiting on a completion rig to be moved on location so that the well can be tested. The completion rig is expected to be on location in the next several weeks with test results anticipated sometime in October. It is worth noting that Delta's geologic assumptions that defined the prospect prior to drilling, which included the expectation of numerous stacked, over-pressured sands in a basin-centered setting, appear to have been encountered in the drilling of the well. Importantly, management believes that the prospect has the potential to hold a separate shallower conventional play that was not seen in any of the earlier wells. It was noted at the meeting that this conventional formation could be similar to a typical south Louisiana gas play that is characterized by high porosity and produce at very high flow rates."
Comments from Eric Sprott
Eric Sprott founder of Sprott Asset Management has one of the best investment records around (http://tinyurl.com/q9a4b)
Sprott Asset Management's largest investment is Delta Petroleum-owning over $ 120 million worth.
Eric Sprott on two separate occasions said that Delta Petroleum has the potential of a 40 bagger and on another occasion stated DPTR has the potential of $800 NAV per share.
Eric Sprott Background
blumontcapital.com
Eric Sprott is CEO and Chief Investment Officer of Sprott Asset Management Inc.
Eric Sprott has established himself as a clear leader in Canada's investment community.
More Sprott: tinyurl.com and tinyurl.com
(Listen at 11 minutes 6 seconds Eric Sprott mentions could be 40 bagger (this is early 2005-Delta has expanded play since then to own 20% of the CRB play up from 12%:
events.streamlogics.com
05/auditorium/index.asp )
tinyurl.com $ 800 NAV
Delta Petroleum
Here is the Delta investor PDF file:
deltapetro.com
DPTR: finance.yahoo.com
Website: deltapetro.com
Columbia River Basin Background
Background: There is no natural gas wells in the state of Washington. Zero.
Geologists have long suspected that the Columbia Basin harbors hydrocarbons. The trick has always been a matter of getting past thick layers of basalt to the sedimentary rock below and then finding a large reservoir. Basalt is not only hard but porous, and tends to absorb energy from seismic waves sent underground to detect gas-holding formations.
In 1913, the Conservative Land Investment Co. of Spokane was drilling for water in the Rattlesnake Hills and found gas instead.
The field didn't go into commercial production until 1929. By the time the operation shut down in 1941, the field produced only 1.3 billion cubic feet of gas, paltry by today's standards. Seattle consumes more than that in one day.
But back then it was enough gas to warrant construction of a wooden pipeline to serve Yakima homeowners.
The region's production potential beckoned again in the late 1950s when what was then Standard Oil of California began a test well. But the company soon abandoned the effort and found no oil or gas.
Fast forward to 1984 when a partnership of Shell and Arco hit a reservoir that displayed impressive initial pressure. But the companies quickly encountered obstacles that made it too expensive to continue drilling.
The Shell/Arco well was not enough to extract commercially. Since then the technology has advanced to make it easier, and cheaper, to recover gas from the tight sandstone beds beneath much of southeastern Washington.
In late 2005 Encana as operator joint ventured with Shell and Delta Petroleum began drilling the first 14,000-foot test well, the Anderville Farms 1-6. (note Shell still involved !!)
EnCana's well is only six miles from the Shell/Arco site, which is now capped.
Encana has gone out of its way to keep everything secret and very quiet. They just finished a second well. Encana may be quiet but Delta CEO Parker spilled the beans at the 11th annual Enercom Gas & Oil Conference. Listen to the results disclosed yesterday by Delta CEO Roger Parker at the Enercom Gas & Oil Conference below.
*****News Story:
wenatcheeworld.com
Headline in the Yakima Herald Republic Friday August 18, 2006
Sitting On a Gold Mine?
Columbia Basin could hold huge natural gas reserves
by Leah Beth Ward
A Denver-based petroleum company with significant mineral rights in the Columbia Basin says drilling results so far at an exploratory well near Mattawa indicate the region could hold significant reserves of natural gas.
*********Delta CEO Roger Parker speech*********************
origin.vcall.com
.htm
Enercom 11th Annual Oil & Gas Confernce
August 16, 2006 1:15pm 15 minutes into presentation DPTR CEO Roger Parker discusses Columbia River Basin
Speech Enercom 11th Annual Oil & Gas Conference Denver August 16, 2006 1:15 pm
Background on recent CRB government lease bids:
dnr.wa.gov
auctionfiles2005/backgrd_
;wa_st_peto.pdf
The geography of the Columbia River Basin:
dnr.wa.gov
Article and background Mattawa Washington:
tri-cityherald.com |
