Ameriwest Energy recently closed the acquisition of a 100% working interest (80% net revenue interest) in the Skull Valley Prospect located in Tooele County, Utah. The company has also become the official operator of the prospect and intends to begin exploration drilling in 2008. Exploration Technologies, Inc. (ETI) of Houston, Texas estimates the prospect could contain as much as 25 to 35 million barrels of oil (MMBO), recoverable by primary production methods.

Shell Global Solutions introduced a new oil and gas prospecting technique that has generated considerable interest in exploration technology. Shell calls the new exploration tool, “LightTouch” which helps locate new hydrocarbon reserves by measuring the ethane gas that naturally migrates from hydrocarbon reservoirs through overlying rock strata. Ethane anomalies are never biogenic and therefore are good indicators of buried oil and gas reservoirs. 

The Skull Valley oil prospect was first identified by geochemical surveying, a process similar to Shell’s LightTouch, conducted by Gulf Oil Company in the 1970’s. The prospect exhibits a significant soil gas anomaly (see figure 1) which has been found to indicate near surface light hydrocarbon seepage sourced from underlying oil accumulations in the surrounding area.  This prospect includes the prolific Grant Canyon field in Railroad Valley Basin, Nevada. The Grant Canyon field has produced over 20 million barrels of oil since 1983 and may ultimately produce a total of 30 million barrels.  The Grant Canyon #3 well flowed at an average rate of 3,809 barrels of oil per day during the month of April, 1987, making it the most prolific single producing onshore well in the U.S. (see figure 3).

Surface soil gas surveys conducted by Exploration Technologies, Inc. (ETI) have demonstrated that the Grant Canyon field, and all of the producing fields in Railroad and Pine Valleys of Nevada, have well defined, near surface soil gas anomalies (see figure 1 & figure 2). Gas anomalies consisting of ethane and propane are typically associated with oil reservoirs while gas anomalies consisting of only ethane are associated with bio-gases.  The geochemical anomalies identified in Skull Valley (see figure 1 & figure 2), which contain propane and ethane, are similar in magnitude and composition to all of the other Nevada oil fields, and even exhibit compositions greater than the Grant Canyon field (see figure 3).

In the 1990’s two exploration wells were drilled on the Skull Valley prospect (see figure 1 & figure 2). The Pierce well, targeted at 7,000 feet, reached a total depth of 2,018 feet and was abandoned after losing circulation 9 times. The Saxon well, drilled adjacent to Pierce at a total depth of 6,392 feet, was located on the same structure and in approximately the same surface location as the Pierce well. Both the Saxon and Pierce wells were drilled on structural “highs” contrary to the geochemical data—the prolific Grant Canyon and Trap Spring discoveries were drilled on structural “lows”. While the primary objective, the Devonian Guilmette dolomite, was never reached, good quality reservoir rocks were encountered above the Devonian target. The Pierce and Saxon wells have provided essential information including geologic data, well logs, cutting samples and 3-D seismic data to support further exploration of the Skull Valley Prospect.

Ameriwest’s proposed well is located in an area where significant propane and ethane anomalies were observed by Exploration Technologies Inc.  In addition, the proposed well is located on a geological “low” which is similar to the Grant Canyon discovery (see figure 1 & figure 2).

Recently Wolverine Gas and Oil (a Michigan-based company) announced that its Kings Meadow Ranch # 17-1 Range 1 West well in Sevier County, Utah has about 40 barrels per hour flowing from the Navajo sandstone. The project is located due south of the Skull Valley Prospect, and in our opinion, well within the bounds of this geologic province.