Date: Wed, 19 Nov 1997 23:55:57 GMT Server: Apache/1.1.1 Content-type: text/html Content-length: 8452 Last-modified: Fri, 01 Aug 1997 22:08:41 GMT
EAGLE SPRINGS FIELD
In late 1993, Foreland acquired a portion of the Eagle Springs field, located in Railroad Valley, Nevada. This field, which was discovered by Shell Oil in 1954, had had no development drilling after 1967. Foreland's previous geological studies indicated a significant potential existed to dramatically increase revenues through infill development drilling. We also felt that Eagle Springs field would be an excellent area to test the utility of 3D seismic, a technology which has been a economic boon for exploration and production in other productive basins but which has been used sparingly in Nevada.
In early 1994, Foreland shot a proprietary 3D seismic program over the Eagle Springs field to finalize the development locations required to complete the next round of drilling in the field. Through 1996, eight wells have been drilled in the field and all have been completed as producers. This 100% success rate, in a state where typical development success rate is 50% to 60%, proved the utility of 3D seismic in defining development drilling locations. We completed the most recent Eagle Springs development well in February of 1996 and have successfully continued our efforts at reducing operating costs by improving the production facilities and methods at the field. We have thus improved our margins on every barrel of oil produced from the field.
Effective August 1, 1996, the Company consolidated its ownership in the Eagle Springs field by acquiring the remaining 40% working interest from an industry partner. This acquisition was partially funded with a $10 million bank line of credit that can also be used for additional acquisitions.
By integrating the modern well logs from our development wells, we have a far better understanding of the field and how it produces. With these data in hand, we are now positioned to pursue an enhanced recovery method that will maximize production and ultimate recovery from the field. We have scheduled the pilot program to begin this year and anticipate that preliminary results will be available by year end. Based on preliminary engineering studies, production rates could increase by three to four fold and an additional 10 million barrels of oil could be recovered. We anticipate that production from Eagle Springs field will grow substantially as additional wells are added and the impact of the enhanced recovery program takes effect.
As earth scientists, Foreland personnel strive to be environmentally conscientious in all oil and gas operations. When Foreland acquired the Eagle Springs field, we worked closely with the state of Nevada and the Bureau of Land Management to clean up the pollution left by the previous operator. For our efforts, Foreland was awarded the first ever "Health of the Land" award from the BLM. Foreland's clean up was also recognized as the Best Environmental Project in the Pacific region by Hart's Oil and Gas World.
GHOST RANCH FIELD
In July 1996, the Company made the most significant exploration discovery in its history, the Ghost Ranch field. Located one half mile south of Eagle Springs field, the discovery location was identified using the same 3D seismic survey which we utilized to successfully drill and complete eight development wells at Eagle Springs field. While 3D seismic has become the exploration tool of choice in many other basins worldwide, we are the first to successfully use this technology in Nevada exploration. As in many other basins, 3D seismic offers the potential to unravel the geologic complexities of Nevada and as such, the Ghost Ranch discovery is a testament to this potential. Based on the Ghost Ranch success, future use of 3D seismic for exploration is expected to reduce the exploration risk and dramatically improve the exploration economics in Nevada as it has elsewhere.
The first Ghost Ranch well, the #48-35, was completed in August, 1996. The second producing well, the #38-35, began production in late February, 1997 and combined with the #48-35 has produced approximately 90,000 barrels of oil to date. A third well the #47-35, was placed into production in June, 1997. Today, the Ghost Ranch field is producing over 500 barrels of oil per day. The use of 3D seismic in the discovery of Ghost Ranch field is a significant development in the Nevada oil industry. The Ghost Ranch discovery was named a runner-up in the Best New Well category for the Pacific Region by Hart's Oil and Gas World.
DEADMAN CREEK FIELD
Foreland's exploration efforts in 1996 were rewarded with the discovery of a second field, the Deadman Creek field, located in Toano Draw in northeastern, Nevada. After reentering a well previously drilled by another company, we tested several additional zones that are now producing Nevada's highest gravity oil. Although the original well had many drilling and completion problems that compromised the integrity for the reservoir, the Company successfully completed the well in a formation which has not produced elsewhere in Nevada, but is similar to the prolific Green River Formation which produces in Utah and Wyoming.
We plan to continue exploitation of this area through the use of 3D seismic, which was used very successfully at Eagle Springs and Ghost Ranch fields. Because of the similarities with the Green River Formation, we also plan to utilize drilling and completion techniques similar to those developed in the Utah and Wyoming Green River fields. These techniques include horizontal drilling, in which the wellbore is drilled in the optimum direction in order to intersect as many of the productive fracture intervals as possible.
The success at Deadman Creek, which is located 95 miles from the nearest oil production, is a result of our continuing efforts at identifying appropriate areas for exploration using our vast geological and geophysical data base and extensive experience in Nevada.
Foreland Corporation - Copyright © 1997