Aspen Exploration Corp., Denver, maintains low overhead costs and emphasizes natural gas in its exploration and development drilling, with a focus on the Sacramento Valley of California.
Robert A. Cohan, president of Aspen's West Coast operations in Bakersfield, Calif., said Aspen also is interested in acquiring producing properties if it can find good-quality properties for the right price. "They are very hard to come by," he said.
"Most of what we drill is low to moderate risk. It's exploration near existing production," Cohan said. Aspen was founded in 1980, and the Bakersfield office was opened in 1995. From fiscal 1996 through 2002, Aspen's net gas reserves increased to 2.21 bcf from 106 MMcf.
Aspen recently sold the last of its oil production, but the company has leased 10,000 acres near giant Kern River field.
"We are going to shoot a 14 sq mile 3D seismic survey looking for the Vedder formation and light-to-medium oil from depths of 2,000 ft to 5,000 ft," Cohan said. Aspen operates the Lower Miocene project and has partners.
"Typically, we always prefer to operate. The only time we don't operate is when another operator brings a submittal," Cohan said, adding that Aspen operates 70% of its 32 producing wells. Aspen keeps 15-36% interests in those projects that it operates.
In the last 3 years, Aspen drilled 18 successful gas wells out of 27 attempts for a 67% success rate.
Production
From 1996 through 2001, Aspen's primary gas production came from its Denverton Creek leasehold in Solano County, Calif., but now that is only one of three key production areas.
"There are 10 productive horizons in that field. We actually discovered new horizons that never produced before. Just from the wells we found, we've already made over 9.2 bcf, and we are still going strong," Cohan said. "Denverton's production has declined, and now it is equally important for us with the Kirk-Buckeye field area in Colusa County and the Sour Grass prospect area in Tehama County. Instead of having all of our eggs in one basket, we have diversified."
Currently, Aspen produces 1.6 MMcfd from Denverton Creek field.
Within the last 2 years, Aspen got involved with the Sour Grass prospect. It has a 23.3% operating interest in a 3,300-acre lease on which it has shot some 3D seismic and drilled two gas wells. Cohan expects to drill at least seven wells there.
In the Kirk-Buckeye area, Aspen has drilled two wells based on 3D seismic, and the company plans to spud two more wells in that area within the next 2 months, Cohan said. Gas production started in September 2001.
Operating philosophy
"Aspen is very conservative," said Cohan, who is the only person in the Bakersfield office. "We don't overextend ourselves. We stay really prudent. For every one well we drill, maybe we will look at 20-30 prospects."
He sees the biggest challenge as finding "enough good quality gas prospects to drill…. We have a lot of prospects lined up, but I am always looking ahead."
Cohan said the biggest challenge used to be raising money and finding partners to drill wells, but that has changed with Aspen's success as an explorer.
"I have a very good group of partners that have been with me for years. We've had a lot of success, which creates faith in Aspen and also provides available revenue with which the partners can reinvest," Cohan said.
"Aspen is very conservative. We don't overextend ourselves. We stay really prudent. For every one well we drill, maybe we will look at 20-30 prospects."
