Message from the President...
 Greetings again,
We've had a busy time since our last newsletter with exciting increases in the price of oil and the acquisition of the 8,739 acre Burke Ranch Field. With this acquisition we continue to expand our approach to the development of our assets; namely via the expert management of our program for tertiary recovery of existing fields and the exploration of prospective lands.
First of all, let's begin by looking at our tertiary recovery properties; South Glenrock "C" with its potentially recoverable 4.9 MBO and our latest acquisition; the Burke Ranch field which had an excellent primary and secondary lifespan, producing some 6.5 million barrels to-date. Recent studies by engineering firms examining CO2 tertiary recovery methods in fields in the SW Powder River Basin having similar geology as Burke Ranch show 20 to 25 % recovery of Original Oil In Place ("OOIP") by CO2 injection. This could equate to a tertiary reserve potential of 2.4 million barrels at Burke Ranch and since this property has been worked over previously, a wealth of historic technical information is available to aid our recovery efforts. The field also offers the added feature of close proximity to service and support infrastructures. Consequently, a successful recovery program for both fields could potentially combine to return up to 7.3 million barrels of oil via CO2 injection or other enhanced oil recovery technology.
Secondly, our exploration property at Skull Valley has been identified by Exploration Technologies Inc. (ETI) as showing identifiable similarities to the nearby Grant Canyon field. Located approximately 125 miles southwest of Skull Valley, the Grant Canyon field has produced up to 30 million barrels of oil. According to ETI, Skull Valley shows greater potential than Grant Canyon due to the potential of additional reservoirs in the Mississippian carbonates. They report that perhaps 50 to 100 million barrels of oil may be indicated at Skull Valley. The proximity of this prospect to Salt Lake City also enhances the ease of production via decreased service and trucking costs.
The third component of our approach is all about solid management. Recovering oil is a subject we are quite familiar with and good at, but growing a company today requires increasingly specialized expertise across a broad range of skills. Geologic proficiency and extensive knowledge of the region notwithstanding, an oil company like Ameriwest also needs far-reaching business relationships and solid financial judgment in order to succeed. I am so pleased to have that expert assistance through the aid of Chris Wright and Jon Nicolayson as part of our team and by providing their access to a tremendous breadth of contemporary oil business insight.
Chris has over 20 years of experience in the finance and administrative management of both private and public companies. He founded Velvet Exploration Ltd 1995 and served as the chairman until it was sold to El Pasco Corporation in June 2001 for $432 million. He is the President and Founder of First Merit Group, a successful venture capital and private investment firm.
Jon brings 40 years of experience in the mineral development business; he served 19 years as President of JK Minerals, a private company focused on consolidated ownership and increased production potential of existing oil fields including Wyoming's Cole Creek field.
As an added item of interest, I have included a chart from an article about how much oil the US is importing and from whom. I knew the number was large, but when you see it, it is really quite something. Given this fact, it is even more important to me that we oil men in the USA keep working on surfacing our domestic reserves.
This is an incredible time to be in the oil business. Oil prices are at $110 and all indications are it may go higher yet and with these highs comes tremendous opportunities. We look forward to the coming months and thank you for your interest in our company. Keep an eye out for our news releases and remember, you can always sign up on the website to get them sent to you automatically, and as we do update our website continually keep coming back to see what's new. As always, if you have any questions, do give us a call.
Sincerely,
Walter Merschat, President
Ameriwest Energy, Corp.
The Ameriwest Advantage
- Experienced management with extensive local knowledge
- Strategic combination of low-risk producing properties and high potential exploration plays
- Strong local partners, including a team of expert
landmen
- Collaboration with NITEC LLC, a highly reputable reservoir engineering firm
- Expertise in Enhanced Oil Recovery ("EOR")
- Targeting a geographic area with many overlooked opportunities that we believe is less competitive and less developed than Texas or Alberta
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Ameriwest Energy:
Our Mission, Our Vision, Our Principles
Mission: To develop a company offering a strategically planned economic balance between low risk tertiary recovery projects and well-documented high return
exploration prospects.
Vision: To create a viable and sustainable oil and gas production company focused on the Rocky Mountain region.
Core Principles:
- Focusing on value. Management's investment
decisions are based on creating shareholder value rather than just reserve and production growth.
- Being a niche player. Focus on what we do best by only participating in the opportunities that closely
follow our mission and vision.
- Leveraging energy market knowledge. Use proven technology and quickly adapt as new technologies develop.
- Investing in people. Invest in our employees and partners, as they are some of our most important
assets.
- Operating ethically and responsibly. Respect the unique and diverse environments we operate within.
Prospects
The Burke Ranch field consists of a total area of mutual interest ("AMI") of roughly 8,739 acres situated approximately 25 miles North of Casper, Wyoming located in the Powder River Basin. Discovered in 1953, the field has been estimated by the Wyoming Oil and Gas Conservation Commission at 13 million barrels of original oil in-place and has produced approximately 6.5 MBO using primary and secondary recovery methods.
Recent studies by engineering firms examining CO2 tertiary recovery methods in fields in the SW Powder River Basin having similar geology as Burke Ranch show 20 to
25% recovery of Original Oil In Place ("OOIP") by CO2 injection. This could equate to a tertiary reserve potential of 2.4 million recoverable barrels of oil. Additional studies including analogous fields within the area have indicated possible and probable recoverable reserves within the Muddy, Mowry/Niobrara, Frontier and Tensleep formations. These include the Twenty Mile Hill Field (1.5 MBO produced from Frontier Formation) and the Lost Dome Field (1 MBO produced from Tensleep). The producing limits of the Burke Ranch Field have not been fully established.
South Glenrock "C" Field
Discovered in 1950, the South Glenrock field has approximately 25.48 million barrels of OOIP with an estimated 17.67 million barrels of remaining oil. Based on the OOIP and a full field CO2 tertiary effort, NITEC LLC (Reservoir Engineers), believe that an additional 20% or 4.9 million Barrels of oil may be recoverable.
Skull Valley Oil Exploration Prospect
Ameriwest has signed a Letter of Intent to acquire a 100% working interest (80% net royalty interest) in the Skull Valley Prospect located in Tooele County, Utah.
According to the report submitted by Exploration Technologies Inc ("ETI"), the prospect was first identified by geochemical surveying, conducted by the Gulf Oil Company in the 1970s. Soil gas data and contour maps from this report show that the geochemical anomalies mapped in Skull Valley are similar in composition and magnitude to those anomalies found over and adjacent to Grant Canyon field, and to the other commercial oil fields that lie within the Great Basin and Range Province.
The Grant Canyon oil field located approximately 125 miles southwest of the Skull Valley Prospect in Nye County, Nevada has been considered a type model for future oil and gas production from the Paleozoic rock formations in the eastern portion of the Great Basin and Range Province and as a model for the Skull Valley Prospect. The Grant Canyon field has produced over 20 million barrels of oil since 1983 and may ultimately produce a total of 30 million barrels.
ETI's evaluation identifies that the similarities between the structural style (slump blocks), geologic column (reservoir rocks), and geochemical anomaly between the Grant Canyon field and the Skull Valley Prospect suggest that with almost 5000 leased acres (over 2000 acres in the heart of the geochemical anomaly) a 25 million to 35 million barrel potential is a realistic possibility. Simply put, since the geology and geochemistry are so similar, ETI stated similar volumes of oil could be expected. Moreover, the geochemical anomaly at Skull Valley may have greater potential than the Grant Canyon field, because of the additional potential reservoirs in the Mississippian carbonates, perhaps even 50 million to 100 million barrels may be possible.
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