Austin outfit eyes Paradox, Hingeline work

Austin independent Royalite Petroleum, owner of 100% working interest in 67,000 acres in Central Utah's Hingeline trend, hopes to explore in the northwestern Paradox basin.

By OGJ editors
HOUSTON, Oct. 11 -- Royalite Petroleum Co. Inc., an Austin independent that owns 100% working interest in more than 67,000 acres in Central Utah's Hingeline trend, also hopes to explore near recent gas-condensate discoveries in the northwestern Paradox basin.

Royalite signed a letter of intent with Twilight Resources LLC and affiliates to acquire a 50% interest in 6,216 acres east of Delta Petroleum Corp.'s Greentown State 36-11 discovery well in Grand County. Consideration is $6.22 million.

Royalite, which becomes operator if it completes the purchase by Dec. 1, 2007, said as many as 77 wells could be drilled on the 6,216 acres. Royalite would carry Twilight through the completion or plugging of two wells drilled to the top of Mississippian or 11,000 ft, whichever is less.

The proposed purchase is also subject to Royalite closing the previously announced acquisition with Central Utah Lease Acquisition LP by Nov. 19, 2007. That deal, for which Royalite is attempting to raise funds, involves the purchase of interests in 108,000 acres in Juab and Sanpete counties north of Covenant field.

The Central Utah deal if completed would involve drilling two wells to the top of Jurassic Navajo sandstone or 12,000 ft, whichever is less. Royalite said the acreage contains Keystone, a prospect in Sanpete County near the axis of the 55-mile Wasatch monocline. Keystone, which contains several four-way closed structures and-or combination fault trap structures, was defined by surface geology, 200 line-miles of reprocessed 2D seismic, gravity, and aeromagnetic data, and 1,200 surface soil geochemical samples.

Primary objectives are Jurassic Twin Creek limestone and Navajo, and secondary objectives are Cretaceous Ferron and Dakota sandstones.

Paradox clastics
Delta said it hopes to ultimately recover 2-4 tcf of gas net to its 70% interest from Pennsylvanian Hermosa Group clastics in Grand County south of Green River, Utah, where it drilled the Greentown State 36-11 and 32-42 wells (OGJ Online, Mar. 2, 2007).

Royalite notes that Delta completed the 36-11 well in two of 16 similar clastic pay intervals and estimated proved reserves in the two perforated zones at 2.7 bcfe in this well. If the untested intervals have similar log characteristics, as Delta reported, estimated proved reserves at the well could exceed 10 bcfe, Royalite said.

The two completed sections had initial 8,000 psi wellhead pressures before the well blew out during tests, Royalite said. Logs from nearby wells also contain similar siltstone, sandstone, and shale intervals and appear to have 800-1,100 net ft of clastic pay intervals interspersed in the 4,000-ft-thick Paradox formation.

The 32-42 well 7½ miles southeast of the 36-11, tested at a combined 2 MMcfd of gas and 500 b/d of condensate from 8 of 16 clastic pay sections identified, and Delta estimated 5.8 bcfe of proved reserves in the eight intervals.

Logs from other area wells show stratigraphic clastics sections with reservoir quality sands not found to the southeast in the basin, Royalite said.

These newly discovered areas in the Paradox and Hingeline are "the best onshore oil and gas plays in the US," said Michael L. Cass, president and chief executive officer of Royalite.

More in Exploration & Development