LONDON, ENGLAND / ACCESSWIRE / March 18, 2015 / Utah has been an attractive oil and gas venue for decades, with three key plays that drew all the attention until a fourth play was discovered by a small wildcatter in 2004, ushering in the largest onshore discovery in the US in 30 years.
Now, as oil prices slump and render unconventional drilling and fracking prohibitively expensive in many cases, all eyes are roving back to Utah's conventional offerings and looking for another wildcatter to wow us like Wolverine Oil did in 2004.
On the wildcatting scene, the real potential here is in the Central Utah Thrust Belt, where Wolverine found the Covenant Oil Field. The wider Thrust Belt is a geologic oil-producing structure that runs from Canada to the southern United States.
Until Wolverine put the Central Utah Thrust Belt on the map, the main oil attractions in Utah were the Uinta Basin, the Paradox Basin and the Utah/Wyoming Thrust Belt.
Now, as shale drillers idle rigs from Eagle Ford to Marcellus, conventional wildcatting in Utah is still moving forward due to the cheaper costs of drilling vertical wells that do not require hydraulic fracturing for extraction.
In 2013, Wolverine pumped 1.1 million barrels of oil out of the Covenant Field, and with oil prices slumping, investor attention is turning to everything in the vicinity of this property-especially the small wildcatters surrounded by bigger drillers.
There are a number of hefty oil producers in central Utah who have made impressive showings over the past couple of years, earning the Central Utah Thrust Belt its long-term place on the energy map.
In East-Central Utah, the Drunkard's Wash holding owned by Devon Energy (NYSE:DVN) has produced over 460,000 barrels, while Houston-based EOG Resources (NYSE:EOG) has produced over 590,000 barrels of oil, and KerrMcGee (Anadarko) (NYSE:APC) has produced over 1 million barrels.
One of the most legendary Rocky Mountains wildcatters-Bill Barret Corp.-also produced 1.58 million barrels in this area in 2013. Barret is largely considered a barometer for wildcatters, having received the Wildcatter of the Year award in 1993 and being inducted into the Hall of Fame in 2003.
There are three things investors are looking at in terms of new Utah wildcatting prospects. The first is proximity to the Wolverine coup. The second is what Bill Barret has done. The third is management, because small wildcatters are a risky bet and only solid management can help turn the risk into reward.
With this in mind, the sector certainly sat up and paid attention in October, when one of the founding members of Bill Barret Corp., Kurt Reinecke, gave up his lucrative job to join the team of a small wildcatter called PetroTerra Corp. (OTCQB:PTRA), whose stocks just started trading in 2014.
Everyone is wondering what Reinecke knows and why he was willing to give up his salary at a $1.2 billion market cap company-where he served as Executive Vice-President in charge of exploration-to bet on this new explorer thought to be sitting on as much as 243 million barrels of oil.
That answers the question of what Barret is doing: Its founder has now become Chief Operations Officer of PetroTerra. It also goes far to ease management concerns, as Reinecke is a geologist who has a strong wildcatting track record on terrain similar to the Central Utah Thrust Belt.
As to who is doing what near the Wolverine discovery, Devon, EOG, Anadarko-they are all drilling near PetroTerra's Sevier prospect and its hoped-for 243 million barrels.
Overall, Utah oil fields have produced over 1.2 billion barrels of oil and hold an estimated 256 million barrels of proved reserves, according to the Utah Geological Survey, and the Central Thrust Belt is the newcomer with the most conventional promise.
The conventional wisdom is this: Shale is too expensive right now, despite the lure of major plays such as Bakken and Eagle Ford, and the market dictates that conventional drilling is back in fashion, and wildcatting promises the biggest reward for those who can navigate the risk.
By James Stafford/Burgess of Oilprice.com
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SOURCE: Oilprice.com
