Madden Gas Field and Lost Cabin Plant
The Madden Gas Field and the Lost Cabin Gas Plant are in Natrona and Freemont counties, Wyoming approximately 95 kms (60 miles) from Elk’s Grieve CO2 enhanced oil recovery project.
- Material ownership in long-life, high quality natural gas and CO2 reserves in one of the largest conventional natural gas fields in the US;
- Significant Proved Developed Producing reserves providing a low risk production base;
- Strong, long-term profitable production generating significant positive cash flow;
- Material growth potential through continued development of multi-tcf undeveloped and unexploited established behind-pipe gas resources throughout the Madden Gas Field;
- Additional financial upside through the continued commodity price strengthening; and
- Secure, long-term access to material developed, producing CO2 reserves and supplies to underpin the Company’s continued focus on CO2 EOR project development and production in the Northern Rockies.
The Madden Gas Field and the Lost Cabin Gas Plant are in Natrona and Freemont counties, Wyoming approximately 95 kms (60 miles) from Elk’s Grieve CO2 enhanced oil recovery project. Elk owns a ~14% non-operating working interest in the Madden Gas Field and the Lost Cabin Gas Plant and associated gas gathering pipeline systems. The Madden Gas Field and the Lost Cabin Gas Plant is operated by Conoco Phillips (46%) and the balance of the unit and gas plant is owned by Moncrief Oil (30%) and various other private interest holders.
Discovered in 1968, the Madden Gas Field is a giant, conventional gas field located in the Wind River Basin and one of the largest gas fields in Wyoming. In energy terms, the State of Wyoming is the USA’s 4th largest natural gas producer and 8th largest crude oil producer. The field sits on the Madden Anticline and covers an area of over 200 sq. miles / 518 km2 / 128,000 acres. The field produces from multiple reservoir units ranging in depth from 5,000 to 25,000 feet (1500 meters to 7600 meters). With an estimated original gas in place of over 5.5 tcf, to date the Madden Gas Field has produced over 2.42 tcf of natural gas.
According to the US Department of Energy’s, Energy Information Administration, the Madden Gas Field is the 33rd largest gas field in the US as ranked by Proved Reserves (Energy Information Administration’s US Crude Oil and Natural Gas Proved Reserves 2015 publication).
The Madden acquisition delivers Elk approximately 70 BCF (11.7 mmboe) of Proven (1P) gas reserves of which 65 bcf (10.8 mmboe) are classified by Netherland Sewell and Associates, Inc. (“NSAI”) as Proved Developed Producing (“PDP”).
|Summary of Madden Gas Reserves
As of 30 June 2017
|Reserve Category||Elk Net (BCF)|
|Proved Developed Producing||67.1|
|Proved Developed Non-Producing||8.2|
|Proved + Probable (2P)||87.1|
|Proved + Probable + Possible (3P)||98.9|
|Certified NSAI Madden Reserves as of 1st January 2017 minus 6 months production to 30 June 2017.|
The asset is forecast to generate positive net operating cash flow of over US$7 million per annum to the Company. Significantly, because most of the reserves secured through the acquisition are classified as PDP under the Society of Petroleum Engineers Reserve Classification Guidelines, no additional capital investment is required to produce these identified hydrocarbon volumes.
Based on the revised acquisition price, Elk has acquired these 1P Reserves at a cost of US$0.25/mcf which is equivalent to US$1.50/boe on a barrel of oil equivalent basis.
Long-Term Profitable Production
The Madden acquisition delivers long-term, low decline rate profitable production with negligible forward capital requirements in the PDP case.
Since January 2017 Elk’s share of Madden production was 23.5 mmcf/day (4,175 boepd). Operator forecasts received by Elk show a Madden Unit production life of 50 years.