Oxy USA takes position in Central Utah thrust play

Oct. 22, 2007
The Central Utah thrust belt oil and gas play may have a new exploration proponent with deep pockets.

The Central Utah thrust belt oil and gas play may have a new exploration proponent with deep pockets.

Wolverine Gas & Oil Corp., Grand Rapids, Mich., and its numerous partners in the 2004 Covenant oil and gas field discovery in central Utah have assigned major interests in the hingeline area to Oxy USA Inc., Houston, an affiliate of Occidental Petroleum Corp., Los Angeles.

A 700-page document filed at Richfield in Sevier County, Utah, indicates that Wolverine and more than two dozen partners assigned to Oxy USA various working interests in Covenant field, four exploration prospects, the Wolverine Unit Area in Sanpete and Sevier counties, and land known as the Arapien Basin Area of Interest.

The document states that Oxy USA, under an agreement dated July 26, 2007, acquired from each assignor working interests in Covenant field, interests in any unit or pooled area in which the leases are included, all oil, gas, condensate, and injection wells, lease equipment, and pipelines.

It was understood that the interests Oxy acquired lie in seven counties in the play. The acquisition also included most technical data. Consideration was not disclosed.

Wolverine and two privately held partners also retained an overriding royalty interest in each lease.

Rig drills a deep test projected to Permian Kaibab on the Hingeline south of Sigurd in Sevier County, Utah, across the highway from the main producing station that contains the Covenant field discovery well and five development wells producing oil from Jurassic Navajo sandstone. Photo courtesy of Michael L. Pinnell, Chief Oil & Gas LLC, Dallas.
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It is also understood that production casing has been set to roughly 11,000 ft, probably in a zone not previously penetrated in Covenant field, at a well in NE SW 17-23s-1w, Sevier County, on the crest of the Covenant anticline.

State figures show that Covenant field produced 884,600 bbl of oil in 2005 and more than 2 million bbl in 2006, when it was the state’s third largest oil-producing field (OGJ, Jan. 17, 2005, p. 42).

Wolverine in 2005 predicted that the thrust belt will become a billion-barrel oil province, but no follow-up discovery has been announced thus far.

Some 150 miles north of Covenant field, Oxy drilled a well east of Coalville, Utah, in 1971-72 and found oil shows in Jurassic Nugget before American Quasar Petroleum Co. took a farmout from Oxy and drilled the Pineview field oil discovery well 1 mile east in 1975 to open production on the Overthrust Belt.