Reports

LOW PRESSURE OIL AND GAS RESERVOIRS

Summary

The development drilling program at Cisco Townsite was commenced by PEMC during August 2005.  Drilling was targeted to test the Morrison formation at approximately 1000 feet.   The play was determined by examining and re-evaluating the oil and gas wells drilled during the 1950 and 60’s.   The development  play in eastern Grand County, Utah is a successful oil and gas development plan that involves shallow natural gas and oil reservoirs in sand stone and silt stone reservoirs.

This  initial  study of the initial 4 wells drilled by PEMC to test the Morrison, Dakota and Ferron formations  provides an objective description of methods for exploration, development, production and evaluation of the three  reservoirs.

Introduction

PEMC, Inc. (PEMC) encountered a  drilling break while drilling to the Morrison formation in Grand County, Utah while drilling the Sweetheart No. 2A  well (Sec. 24-T21S-R23E) in the Ghost Town of Cisco, Utah.  The well was drilled to the Morrison formation and completed as an oil well.  The Sweetheart No. 2A well encountered numerous natural gas shows in the Morrison formation and two gas shows in the Dakota formation.   The well was completed without any stimulation. 

The drilling break in the Ferron was for a total of six feet.  The drilling break resulted in gas to the service with a 5 foot flare.  Overnight shut in pressure was 25 psi  and no liquids was recovered during the shut in period or during drilling through the Ferron.  The well was shut in for a period of three days and resulting in a maximum shut in pressure of 25 psi.  Pressure would build up with 30 minutes to the maximum level.

Subsequently,  PEMC drilled additional wells in Section 24 and 14.  Each of the wells drilled is listed in Table 1. Each of the wells drilled was drilled with air, and encountered  natural gas flow in the Ferron Gas sand.

Three wells were logged with electric logs while the 7A was not logged.  The 7A was drilled as an offset to the 5A.  The 5A well had encountered strong natural gas flows in the Dakota sand.   In order to produce the Dakota sand, the 7A was drilled as a 10 acre offset, however, the Dakota sand encountered in the 5A was not developed in the 7A well.  The drilling plan for the 7A was to drill a 6 ¼ hole to the top of the Dakota, set pipe and drill a slim hole and complete in the Dakota sand open hole.  Morrison formation was encountered in the  7A with strong oil shows.  However, since an open hole completion was attempted, water from the lower Morrison could not shut off. 
A cast iron bridge plug was set at 550 feet and the well re-completed at 530-540 feet.  The well is awaiting an acid fracture treatment to clear the cement between the casing and the formation.

The 14-02 well was drilled in Section 14.   The 14-02 encountered the natural gas in the Ferron, 

Geology

The Greater Cisco Field lies along the Laramide age Cisco anticline in T 21 S R 23 E and 24 E., Salt Lake  Base Line and Meridian, Grand County, Utah.   See Figure 1. The area of interest lies along the northwest-plunging Cisco anticline, which is a subsidiary fold on the northwest-plunging ancestral Uncompahgre uplift.

Weathered Cretaceous Mancos Shale is exposed over most of the area with Cretaceous Dakota, Cedar Mountain, and Jurassic Morrison Formations exposed to the southeast of the Greater Cisco Field area.

Hydrocarbons are produced from Cretaceous and Jurassic age sandstone in combination  stratigraphic structural traps.  Most of the production obtained in the Greater Cisco Field is from the Morrison and Dakota Formations.   

The  top of the Dakota Sandstone has about 50 feet (15m) of mapped closure in the Cisco Townsite area.  See Figure 1.   The Ferron Siltstone is encountered immediately prior to drilling into the A-zone marker, which is a continuous marker and is the top of the Dakota formation.  The A-zone marker is a white chert about 1-1.5 foot in thickness.

The gas in the Ferron Siltstone is generated in the shale located between the A-zone marker and the siltstone.   The siltstone is a clean clear very fine grained formation with extremely low permeability.  The Ferron Siltstone is productive throughout the Cisco Townsite and the Greater Cisco Field.  However, as we move north from the Townsite, the depth to the Ferron Gas gets deeper with a corresponding increase in formation pressure.   The gradient for the Ferron Gas is 0.08 psi/ft.  The heating content of the gas is approximately 1000 Btu/cu ft.

Oil and Gas accumulations in the Dakota and the Morrison formations are stratigraphic stream channels.  Thereby requiring detailed geology in order to determine reservoir extent.   Wells are generally drilled on a 10 acre spacing for the oil wells and 40 acres for natural gas wells.   Once a discovery is made 10 acre offsets are drilled to determine reservoir extent.

Each well can encounter up to four productive pay sands in the Ferron, Dakota and Morrison formations.  Dakota and Morrison formations have a hydrostatic gradient.  At the Cisco Townsite location, the lower Morrison has a large salt water flow.   This was encountered in the 5A and the 7A wells.

Drilling and Completion Methods

Development drilling requires that each well be drilled to the Morrison formation, thus testing each horizon as follows:

Log Evaluation

Log response for the Dakota and Morrison zones shows good porosity and resistivity response.  Each of the initial three wells drilled in the Cisco Townsite area were logged with DIL and porosity logs.  The 7A well was not logged, however a cement bond log was run to correlate the formations.  The Ferron sand however showed  slight response  on the porosity logs, however contrary to expectations there was no crossover.   Electric logs did response with a higher resistivity.  Because the siltstone is dirty and contains clays, the log response is inhibited by the presence of clays.

The A-Zone marker is predominant and can be used to correlate the wells and the Ferron Reservoir.    Figures 2 - 4  are the well logs for the Sweetheart 2A, 5A wells in Section 24 while Figure 6 & 6 are electric and porosity logs  for the 14-21-23-2 well located in Section 14. 

The highlighted portion of the logs is the Ferron sand.

Testing and Production

2A and 5A were completed as oil wells in the Morrison formation, while the 7A was completed as an oil well  in the Dakota formation.  The  14-02 well is completed as a gas well in the Dakota formation.   Each of the wells will be treated with 15% HCL acid to clean up the cement invasion into the formation.

14-02

The 14-02 well was to be completed an oil well, however due to Cisco LLC members wanting faster production, the 14-02 was completed as a natural gas well.  The Morrison oil zone can be completed at a later date.   The well was put on production, however due to line leaks and maintenance problems with Elk Resources the well did not commence actual production until end of February.  The well is capable of producing approximately 50-60 MCF per day after treatment with HCL. 

Sweetheart 5A

The well was completed in the Morrison formation in two distinctive sands. After extensive production testing it was determined that the lower sand was water productive. During April 2006 a cast iron bridge plug was placed to isolate the water zone.

The 5A well has been on production and has been producing between 5 and 10 BOPD of water free oil.   As the well was not treated to clean the cement, the well rate is good for a damaged reservoir.  The oil rate is fluctuating and should stabilize once the well is producing for a consistent period of time and after treating with HCL.

Sweetheart 2A 

The surface equipment was installed during March 2006 and the production testing was commenced during April 2006.  Due to the well be damaged  while cementing, a rate cannot be determined until the well is treated with HCL.

Sweetheart 7A

The well was drilled and completed as an open hole completion.  The lower Morrison zone was water bearing.   The upper Morrison was oil producing, however since the well was an open hole completion, it was decided to install a cast iron bridge plug at 550 feet and re-complete  the well in the Dakota oil sand.  

The well is awaiting an acid treatment.   Depending upon the results, we could produce the well from the current zone or install a 200 foot 3 inch liner and cement the same and complete the well in the Morrison oil zone.

TABLE          

FIGURE 1
GREATER CISCO STRUCTURAL MAP