Projects in the USA
TEXAS overview – In the Fort Worth Basin in Texas, our development strategy is toinvest in proven producing wells, new developmental wells, and highly predictable reworks, thereby diversifying exploration and development expenditures with the intent to maximize returns and minimize risk.
History and geology of Eastland County – In September 1918, a driller named Tom Dees struck oil in the southern part of Eastland County, Texas. Thereafter, Eastland county was catapulted into a bona-fide Texas boomtown. Today, oil still makes up a significant part of the economy, as Eastland County is, from an oil prospective, virtually covered by oil fields.
Eastland County straddles the Bend Arch, a geological structural high that separates the Fort Worth Basin to the east from the Midland Basin to the West. On the eastern side of the arch, the rock strata dip to the east into the Fort Worth Basin. For stratigraphic purposes, the area can be considered the westernmost extension of the Fort Worth Basin.
The organic-rich Barnett Shale (Mississippian-Pennsylvannian) is the primary source rock for oil and gas produced from Paleozoic reservoir rocks in the Bend arch–Fort Worth Basin area of Texas. Subsurface mapping and organic geochemistry demonstrate that the Barnett is present over most of the Bend arch and Fort Worth Basin area.
Eastland County is westernmost extension of the Barnett Shale play and can be considered as part of the active Barnett Shale play area. The Bend Arch has had a significant effect on the Barnett Shale in regards to regarding its burial history and geo-thermal makeup. The Barnett is the source rock for the hydrocarbons produced from many of the shallower zones over the Bend Arch (Hawkeye, Midkiff). It directly affected what was produced from those zones. In general, you get more oil production over the Bend Arch area as a whole (like Stephens or Brown counties) than you do in deeper portions of the Fort Worth Basin where natural gas is more prominent (like Wise or Johnson). Still, there is a lot of potential for gas production in the Barnett Shale in the Hawkeye and Midkiff areas.
Stratigraphic Chart Canyon Division: Click Image for Larger View
Area Potential of Hawkeye and Midkiff Fields — The Hawkeye- Midkiff area has outstanding exploration and development potential. Located in the southwest portion of the Eastland County, this area represents an excellent opportunity to increase the reserve base of the company. In the Hawkeye and Midkiff area, the main producer is the shallow Adams Branch Limestone. Well depths are in the range of 1100’ and the deeper reservoirs are virtually untouched. Typically the wells in this field produce from 50,000 to 280,000 barrels of oil. When viewing stratigraphic charts of the area it becomes abundantly clear that where oil and gas are encountered there is potential across the section for deepening existing wells, down through the Canyon Division on through to the Barnett Shale.
A 2006 “Reserve Estimation” report prepared by Gleason Engineering, Oil and Gas Specialists, on the Hawkeye and Midkiff fields, Eastland County, states:
“Although the producing field in the Hawkeye Filed is the shallow Adam Branch Limestone, every formation from Ellenberger up to the Adams Branch Limestone have produced oil in Eastland County. Preliminary estimates indicate approximately 1.2 million barrels of recoverable oil left in the Adams Branch Limestone in the Hawkeye Field.”
“The biggest producer in the Hawkeye Field will be the Barnett Shale. This formation has been penetrated and does produce in the county. There is no question that it will produce. Typical well production for these wells based on our staff’s experience and studies published by Devon and EOG Resources is approximately 1-2.5 BCF of gas per well. Our reserves in the Hawkeye Field will range from 20-50 BCF, estimated value of $30 million to $75 million, or $1.50/mcf. This is approximately 3.5 million to 8.5 million barrels of oil equivalent in the Barnett alone. It is estimated that the Ellenberger Limestone below the Barnett will be productive and as will the Marble Falls Limestone above the Barnett and the Bend and Caddo formations.
Estimated Value of the Oil reserves in the Adams Branch is $12 million to $16.7 million, or $10/barrel of oil in place.”
In the Fort Worth Basin in Texas, our development strategy is to invest in proven producing wells, new development wells, and highly predictable reworks, thereby diversifying exploration and development expenditures with the intent to maximize returns and minimize risk.
Following the recent acquisition of B&B Oil, Inc., Quest Oil acquired approximately 1,198 acres in Hawkeye and Midkiff Fields in Eastland County, Texas. The Hawkeye- Midkiff area has outstanding exploration and development potential. When viewing stratigraphic charts of the area it becomes abundantly clear that where oil and gas are encountered there is potential across the section for deepening existing wells, down through the Canyon Division on through to the Barnett Shale. Typically the wells in this field produce from 50,000 to 280,000 barrels of oil.
FUTURE PROJECTS > Warner, Alberta
Alberta overview – The Company’s immediate and most promising prospect lands in Canada are located in five prolific gas regions in Southern Alberta consisting of proven shallow and deep gas pools. Our Canadian properties are an excellent example of our strategies geared towards higher risks and rewards. Through our wholly owned subsidiary, Independence Energy Corporation, we currently maintain drilling rights to more than twenty sections of land in the Alberta.
Management’s focus is on prospects having a minimum potential of 30bopd or 250mcf/d. These are the types of prospects that can be brought to fruition quickly. We believe that these minimum levels of production will provide an average well payout approximating 6 months.
In order to mitigate risk, the company is exploring in known areas and where pool extensions are possible and land is available for purchase or under farm-in agreements. In most cases, we attempt to tie up a minimum of 1920 acres (3 sections). We target prospects in areas which we believe have the potential for multiple zones and wells with “stacked reserves.”
We also attempt to farm-in or option larger blocks where exploration risk can be spread over many sections of land and new pools are possible. An example of this is the Central Saskatchewan project. We are negotiating options on the mid to deeper rights on 4 areas. We believe these options contain vast potential for new field discoveries.
Quest Oil holds three properties Warner, Taber and Diamond in Southern Alberta, (twp. 5 – 10 Rge. 17-23W4) through its subsidiary, Independence Energy Corporation. Independence has made a total of 5,504 net acres land available for development and exploration. Natural gas production comes from three producing wells on the Warner property, which consist of 20 sections of land net 40% ownership interest, and from one producing well on the Taber property, which consists of one section of land net 50% ownership position.
The Company has a 40% working interest in 16.5 sections and 100% of one section in the Warner area (approx. Twp. 5 Rge 17W4M), and this area offers the potential for stacked multi zone production from the Barons, Medicine Hat, Bow Island and Belly River formations. Reservoir mapping and overall well productivity suggests the Barons sand reservoir quality improves northwest along the trend. As a result of reduced sizes for spacing units the Company has locations for three new offset wells, and the development opportunity for over 50 shallow gas wells. A shallow gas mandate provides low risk and low cost drill program. The results are low levels of production with long life deliverability. Numerous wells in the Warner area have been in production over 15 years.
In the South Taber area (approx. Twp. 9 Rge 17W4M) the Company has a 50% non-operated working interest in 640 acres of land (1 section).
In the Diamond area (approx Twp. 10 Rge 23W4) the Company has a 50% non-operated working interest in 1920 acres of land (3 sections). In this area the Bow Island and Barons zones indicate sizeable potential.