Probably by now, most TRILers have read the following June 18 article by Bob Christie:
bakersfield.com
Gearing up to go deep
June 18, 1999
By BOB CHRISTIE
Californian staff writer
e-mail: bchristie@bakersfield.com
LOST HILLS — The blowout is over, but the show hasn't stopped in western Kern
County for a group of Canadian and U.S. companies wildcatting for new deep
natural gas fields.
After taming an out-of-control well at Lost Hills on May 28, the partners now plan
on spending from $28 million to as much as $40 million in the coming year to drill
four more very deep wells here — one at Lost Hills and three at additional
prospects — all targeting a deep formation they've identified as holding potential
for extremely large reserves of gas.
The new wells all are aiming at a deep rock formation known as
the Temblor, which produces oil at shallower depths in other
areas and has been thrust deep underground where the
wildcatters are drilling.
The Denver oil man who put together the series of prospects along with another
Denver company, PYR Energy, believes — and has convinced many others —
that a series of overlooked deep reservoirs lie just east of existing shallow oil
production on the Valley's west side.
Bill Armstrong, owner of Armstrong Oil and Gas, said he believes he has
identified all the potential deep plays, and with the blowout at Lost Hills there is
now plenty of evidence the deep rocks can hold lots of hydrocarbons.
"We have an idea of what we have at East Lost Hills and these other three are
deja vu all all over again," Armstrong said.
Three weeks after conquering the history-making Bellevue No. 1 well east of the
Lost Hills oil field, drilling is continuing on a replacement for the failed well.
Drillers are using the same well bore used as a relief well for the blowout to again
target a deep gas reservoir at more than 17,600 feet. After beginning the redrill at
about 10,800 feet, Nabors Drilling USA crews have pushed beyond 13,000 feet in
recent days.
In November, the original wildcat well struck what appears to be the county's
newest and deepest natural gas reservoir, then blew out of control for more than
six months. The blowout was one of the largest ever in Kern County, and likely is
the biggest onshore U.S. blowout in years.
Some of the companies involved have said they believe East Lost Hills — and
each of the three other prospects — could hold gas reserves of more than 2
trillion cubic feet each. That would make them all world-class fields by any
measure.
Those estimates are speculative; the truth won't be known until the drilling
program at East Lost Hills and the trio of wildcat wells are completed.
In addition to the costly replacement well currently drilling, the first step-out well
at the newly christened East Lost Hills gas field is expected to begin drilling next
month.
That well will be operated by Calgary-based Berkley Petroleum Corp., which has
taken over as operator for all the additional wells as well. It will be drilled about
two miles north of the blowout well.
Elk Point Resources Inc., also of Calgary, was operator on the Bellevue well and
will continue running the operations at the replacement well site. The blown-out
Bellevue No. 1 well has been abandoned.
The three other prospects will be drilled in sequence with a rig that was just
hauled to Kern County.
The first, Berkley Cal Canal No. 1, began drilling on Tuesday at the existing Cal
Canal gas field, about 10 miles south of East Lost Hills. The Cal Canal gas field
is about two miles east of the massive South Belridge oil field.
Cal Canal is run by a local independent oil and gas company, San Joaquin
Facilities Management, run by Mike Kranyak.
Kranyak said his company bought the Cal Canal property from Chevron in 1994,
but the deal didn't include the deep rights, under the existing production at about
12,000 feet. After reviewing the seismic data Chevron held, Kranyak said he went
back and bought the deep rights as well.
"I knew what was out there," he said. "I think that it has very strong possibilities.
"From a geologic standpoint there's no question in my mind that the
(hydrocarbon) sources are there and the structure is there," Kranyak said. "It's a
question of rock quality, and the East Lost Hills prospect has proven that you
can have good rock quality at those depths."
Kranyak was approached about participating in the new Cal Canal well, but opted
to lease his deep rights and take a royalty position.
That decision allows San Joaquin to benefit from a discovery without risking
capital.
The second prospect is about two miles south of Cal Canal, and is dubbed Lucky
Dog. That wildcat will be drilled after the Cal Canal well reaches its target of
about 18,000 feet.
The third well is about 20 miles to the north, and is dubbed Pyramid Power. Its
location is more closely held, and a more exact location hasn't been released by
the participants.
Each of the new wells is expected to cost between $7 million and $10 million,
massive sums for a well in Kern County. The costs skyrocket because the depth
means drilling can take as long as six months, and high-strength drill pipe,
casing and blowout preventers will be needed.
Over-engineering the new wells is necessary to avoid another failure such as the
blowout that doomed Bellevue No. 1. Since that well was killed, all eyes have
turned to the replacement well and the next series of prospects. "Its really nice
that the blowout's behind us," said Mike Rose, president and CEO of Berkley.
"Now we can go forward and evaluate."
Berkley is the largest of the Canadian firms participating, with 1998 revenues of
$131 million and production of 20,000 barrels of oil equivalent per day. Revenue is
expected to reach $270 million in 1999, because of drilling successes, Rose
said. Berkley targets deep gas, mainly in Canada's western provinces.
In western Kern County, Berkley is investing heavily, and Rose said he is highly
optimistic of a major find.
We know we've found something," he added. "We just don't know how big it is."
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This part is of interest to me:
"Kranyak said his company bought the Cal Canal property from Chevron in 1994,
but the deal didn't include the deep rights, under the existing production at about
12,000 feet. After reviewing the seismic data Chevron held, Kranyak said he went
back and bought the deep rights as well."
I thought when land was leased, you had all the rights...deep, shallow, middle...all. I assume TRIL has "deep rights" on the 26 square miles leased for Project EKHO??
VanGo101...Van
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