Covenant oil field in the Central Utah thrust belt may have a companion soon.
Covenant field, discovered by private Wolverine Gas & Oil Corp., Grand Rapids, Mich., produced its 5 millionth bbl of oil in early 2008, and a press report indicates that a second discovery may be announced soon pending test results.
A Wolverine official is quoted in a Utah newspaper saying that the company could be producing oil later in May from a second discovery well. He said geologic indicators look good at the well, Arapien Valley 24-1, in 24-20s-1e, near Mayfield in Sanpete County, Utah.
The wellsite is about 20 miles north-northeast of Covenant field in 23s-1w, Sevier County. A completion unit was working as of this writing in early May.
Despite the “tite-hole” nature of the play, Wolverine seems to have lent credence to the report by applying to Sanpete County to build a temporary storage/treatment facility and loading station.
Since discovering Covenant in May 2004, Wolverine has drilled five exploration wells in and near the thrust belt, four of which it lists as dry or temporarily abandoned. The fifth, if it is determined to be a discovery, could be named Providence field.
Sources said several of the play’s “unsuccessful” exploratory wells may be on the edge of potentially productive structures and may be sidetracked later.
Oxy USA Inc., Houston, a subsidiary of Occidental Petroleum Corp., Los Angeles, acquired major interests from Wolverine and its partners in seven counties in the play last year (OGJ, Oct. 22, 2007, p. 37).
Covenant’s status
Cumulative production from Covenant field was 4.9 million bbl through the end of 2007, state figures show.
The field, which doesn’t produce gas, also has made 1.24 million bbl of water.
The December 2007 average was 4,636 b/d of oil and 1,695 b/d of water from 10 wells. Most of the oil comes from Jurassic Navajo sandstone at 6,200 ft.
Wolverine reported completing the 17-8 well producing 145 b/d of oil and 450 b/d of water from the subthrust Jurassic Twin Creek formation. This and the 17-9 well have raised the number of wells capable of production at Covenant to 12.
Eight more Covenant wells are permitted, three of which have spud.
Wolverine and Oxy plan to shoot a large 3D seismic survey later this year over Covenant field and the surrounding area about 8 miles northeast of Richfield, Utah.
Refinery utilization in Salt Lake City is at capacity, and it is difficult to see how production on the thrust belt could be increased much absent additions in refining or pipeline capacity.
Exploration outlook
Sources said that as many as three exploratory dry holes in the play might be sidetracked based on positive post-drilling seismic reevaluations.
These include one by Wolverine in 18-19s-1e, Sanpete County, and one by Petro-Hunt LLC, Dallas, in 15s-2e.
Oxy and Wolverine, meanwhile, have obtained permits to shoot 280 line-miles of 2D seismic later this year in Sevier and Sanpete counties.
Sources said the companies plan to drill two to three more exploratory wells in the play this year.
In addition to taking interests in Wolverine and partners’ original acreage, Oxy purchased 50-100% working interests in about 65,000 acres in the thrust belt from Plains Exploration & Production Co., Houston.
Overall, Occidental said it invested $743 million in 2007 to acquire several new properties in California, the Rocky Mountains, and the Permian basin, collectively increasing its proved reserves by 50 million boe.
Other operators
Numerous other large and small companies are attempting to establish footholds in the play.
Private Anschutz Exploration Corp. of Denver is active at the north end of the play and is permitting a follow-up to a dry hole it drilled 2 years ago.
Petro-Hunt drilled a well west of Ephraim, Utah, that encountered the Twin Creek formation three times. It is comtemplating reentry and directionally drilling to the west. Petro-Hunt staked a location just south of Wales, Utah, about 6 miles north of its temporarily abandoned well, that may be drilled.
Private Freedom Oil & Gas has acreage north of Petro-Hunt and is trying to raise funds for drilling.
Pioneer Natural Resources Inc., Dallas, is shooting seismic on a separate thrust west of the Arapien Valley 1-24 well. It bought a major working interest from private Burnett Oil Co., Dallas.
Far to the south, Delta Petroleum Corp., Denver, drilled a well in Iron County west of Parowan, Utah, and plans to test shows in the Twin Creek this fall. The company also plans to drill in Beaver County just south of Beaver, Utah.
Delta disclosed that it has identified at least 20 prospects between Parowan and the Arapien Valley 1-24 well that it would like to drill eventually.
Delta drilled its first well southwest of Covenant field anticipating Navajo at 5,000 ft. Instead, it cut igneous rocks from near surface to 11,000 ft and penetrated Navajo below that. The well was 1½ miles low structurally and dry.
Talisman Energy Inc., Calgary, has purchased some acreage in the thrust belt and has done some 2D seismic.
Private Chief Oil & Gas LLC, Dallas, purchased 50% working interest in 180,000 acres in the thrust belt. The other 50% is owned half by private International Petroleum LLC, Salt Lake City, and half by Pioneer Oil & Gas, South Jordan, Utah.
Utah Great Eagle hopes to drill a location 2 miles east of Covenant field this year.
