Wildcat
Natural Gas
Play Could Be A Score
San Joaquin
Basin Natural Gas Prospect
Shows Promise in High Producing Area
By Robert Wallen
In
the October 15th edition of Barron's, veteran oil banker
Tom Petrie, of Denver-based Petrie Parkman, announced that he
saw "plenty of upside in oil companies," anticipating
that crude oil would average $22/barrel and natural gas would
average $2.75 per thousand cubic feet, next year. Petrie, whose
firm advised the Saudi government on the privatization of its
gas industry, believes there will be an "inevitable overhaul
of U.S. thinking about domestic (energy) reserves."
This is very good news
for a small petroleum and natural gas exploration company, by
the name of International Brooks Petroleum Ltd. ("IBP").
IBP is a publicly traded company in Canada which holds energy
prospects based in California and Louisiana (Canadian Venture
Exchange: V.IBP; OTC/BB trading symbol: IBPLF). IBP's current
focus is its property in California.
IBP is the Operator
and holds a 50% working interest in a 1,116 acre property known
as the Harvester #1-25 prospect (the "Harvester").
The property is located in Kings County, California within the
southern San Joaquin Basin of the Great Valley of California
and 60 miles north/northwest of Bakersfield, California.
Past history of the
Harvester is always important because so much can be learned
from the data retrieved in those programs. In this case, the
Harvester was successfully drilled in 1982 to a total depth of
15,200'. The well was drilled on the expectation that light oil
would be discovered. The potential for natural gas production
was discounted as in those days natural gas was not the commodity
it is today. A full complement of open hole logs were run in
the Harvester well. The Harvester well was cased to 15,200' in
anticipation of production from the Kreyenhagen formation at
a depth between 14,600' and 15,200'. After four years of work
and the expenditure of over $4 million (US), the partners in
the Harvester well refused to continue contributing and the well
was plugged and abandoned. At the time of abandonment, crude
oil had plunged to $11/barrel and tough times spread throughout
the oil patch across the United States.
Reasons For Possible Success
Surging natural gas prices of the past year re-energized the sector and now IBP hopes to benefit from a revitalization of the industry. A technical report prepared by Robert M. Scoggins (Registered Professional Engineer; Member of both the American Society of Petroleum Engineers and Louisiana State Association of Professional Engineers) explained that "this is a premium prospect with possibly excellent financial returns" and concluded that "the Harvester #1-25 project to be a property of merit." Scoggins cited several reasons for proceeding with additional exploration of the Harvester:
1. The well has several untested potential hydrocarbon bearing zones.
2. Gas kicks and fluorescence were recorded during the drilling over several zones containing sands.
3. The response of the compensated neutron-formation density log indicates the presence of gas in porous sections.
4. The cost of re-entering the well should be substantially lower than drilling a new well.
5. The deeper formations have become highly prospective in the central basin with the gas discovery by the Berkley group in the deep Temblor at East Lost Hills.
Albert Raponi, president and CEO of IBP, said, "We anticipate this well to produce natural gas and natural gas liquids, i.e. light oil."
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This is a photo illustration of the RMT-Elite
Analysis |
Highly Prospective Area
If
you are unfamiliar with the San Joaquin Basin, then it is crucial
that you understand the general area has been productive since
the 1950's. The San Joaquin area is known in energy circles for
its predominant oil production and associated natural gas. While
there is no current production at the Harvester well location,
the nearest production is two miles away in the Harvester gas
field in the Atwell Island formation. Four miles east-southeast
is the Trico Gas Field. Two miles east is the Northwest Trico
Field.
More recent is the
natural gas discovery by Berkley Petroleum (since acquired by
Andarko Petroleum [NYSE: APC]). That discovery was at a depth
of 19,700' and flowed natural gas and natural gas liquids at
prolific rates during testing. The East Lost Hills #1 well, approximately
14 miles south/southwest of IBP's Harvester, began producing
in February 2001 at a rate of 15 million cubic feet per day of
natural gas and 923 barrels of natural gas liquids per day.
Closer to IBP's Harvester
well is the Ivanhoe Energy (Nasdaq: IVAN) and Aera joint venture
project, which is currently drilling the Northwest Lost Hills
prospect. Ivanhoe's geo-science team reported in a recent update
that the company's net share of the deep-gas in the Temblor target
has an estimated reserve potential in excess of one trillion
cubic feet. It should be noted that IBP's Harvester contains
the Temblor formation as well as the deeper Vedder and Kreyenhagen
formations.
Ivanhoe Energy Chairman
Dave Martin says, "Success by the industry south of our
location has demonstrated the potential for large natural gas
reserves in the Central California deep-gas play." He added,
"A successful well at this location would confirm the deep
Temblor gas reservoir at Lost Hills to be a major, world-class
discovery."
Last year's energy
crisis in California has fueled natural gas exploration in the
productive San Joaquin Basin. In light of the world-class discovery
made by Berkley Petroleum, it will not be a surprise to find
that both Ivanhoe and International Brooks Petroleum have become
economic natural gas producers in this area.
RMT-Elite
In
the report of Robert M. Scoggins, it was recommended that a newly
developed cased-hole logging tool, the RMT-Elite log, developed
by Halliburton (NYSE: HAL) be run in the Harvester well after
clean up. The purpose of the tool is to monitor present static
conditions of the potential productive reservoirs and changes
that might have occurred since drilling in 1982. One of the most
important uses of the RMT-Elite log is that it can tap into a
bypassed or overlooked hydrocarbon reserves missed from the original
log interpretative evaluations. It can show sand quality and
differentiate the productive, from the non-productive, intervals
in the homogeneous sand body. The tool can be used to calculate
more accurate probable reservoir reserves and to prioritize the
completion order and techniques used to perforate and test possibly
productive intervals.
IBP re-entered and
cleaned out the Harvester during July and August of this year
and the RMT-Elite Log was run. According to Scoggins, the results
exceeded the original expectations. The RMT-Elite indicated an
increase of 273 feet of gross pay and an increase of 127 feet
of net pay over data from the original report. According the
engineering report, the total indicated gross pay now stands
at 486 feet and the total indicated net pay stands at 250 feet
of possible productive intervals.
Exploration Update
IBP's
joint venture partner, Asdar Group, has advanced funds to cover
its portion of the next phase of the exploration program, the
perforation and testing of the well. This is the chapter where
the Harvester prospect could advance from a wildcat exploration
to a serious developmental project.
The perforation and
testing program is designed to test two Primary zones and the
five Secondary zones for gas production. Testing should occur
during late October with results of the perforation and flow
tests expected before the middle of November. IBP President and
CEO, Albert Raponi, said on a note of optimism, "We are
expecting gas flows comparable to those in the East Lost Hills
find."
At this point, IBP's
potential success rests upon the perforation and flow testing
of the seven identified zones of interest which were identified
using the RMT-Elite log. By the time you read this article, the
results of the next phase of exploration may have already been
released and the highly speculative nature of a wildcat exploration
play might be history.
Editor's Note: Robert
Wallen, business writer, might hold a position in securities
mentioned.
For More Information:
Trading Symbol: CDNX: V.IBP; U.S. OTC/BB: IBPLF
Contact: Albert Raponi, President & CEO
International Brooks Petroleum
Ltd.
600 535 Howe St., Vancouver, B.C.
V6C 2Z4
Toll Free: 800-665-3250
Phone: (604) 683-0466
E-Mail ibp@telus.net
Issued and Outstanding Share Capital as at 15/10/01: 15,200,792
For the latest news developments visit: http://www.intbrooks.com
