Posted on 06/24/2005 9:45:23 AM PDT by rockthecasbah
The Utah State Division of Oil, Gas and Mining is poised to approve up to 1,500 oil-drilling permits in 2005, setting a record for the second consecutive year. Division chief John Baza last week told a legislative committee the discovery of a large oil field near Sigurd seems to be driving the interest in Utah oil.
Baza reported his division has seen a "smattering" of interest in eastern Utah's oil shale and tar sands, but technology to make them commercially viable still hasn't arrived.
Oil production has risen, Baza said, largely due to a major discovery in the Covenant oil field in Sevier County, where Michigan-based Wolverine Oil & Gas Co. has produced more than 210,000 barrels of light crude in the past year.
Two of Wolverine's 11 permitted wells are in production and generating about 1,500 barrels of oil per day, Baza said, which translates to about $75,000 per day. A barrel of oil is 42 gallons.
Tom Chidsey, petroleum section chief for the state Department of Natural Resources, said the Covenant oil field 130 miles south of Salt Lake City is likely the largest oil discovery in Utah in 25 years, and may eventually prove to be the nation's largest such discovery for the same time period.
Chidsey said the field could contain several hundred million barrels of oil, but that won't be known until the wells' production starts to decline.
Geologists have been exploring the area for 50 years, but drilled only dry holes until last year. Chidsey said the discovery has led to better understanding of the area's geology and its "reservoir rock," sandstone that contains water, oil and gas sealed by salt and trapped in rock folds formed some 65 million years ago.
Wolverine explorers believe there are about 25 more "traps" in the field, Chidsey said. "We think the right conditions are there," he added.
Baza said a well in Juab County east of Nephi that started producing oil about a week ago is the first in the same geological area as Wolverine, and could be an indication of the area's vast reserves.
The Wolverine wells, located between Sigurd and Loa, are trucking crude oil to refineries in Salt Lake City and southeastern Utah, Chidsey said.
Baza said there would have to be 10 to 20 times the amount of current productivity before a pipeline would be economically feasible.
A classic wildcatter story. The Covenant Field is over fifty miles from the nearest production and over 150 miles from the nearest analog production. Tiny company makes an "elephant" sized oil discovery in an area abandoned by Chevron and surrounded by 58 dry holes drilled by previous operators.
For some reason, I just can't see Utah as a roughneck haven
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