Singleton South Field
The Singleton CO2 EOR Project is currently on care and maintenance. The Company will continue to evaluate the viability of the redevelopment of the Singleton Oil Field through CO2 enhanced oil recovery.
The Singleton South properties are immediately south and contiguous to Elk’s Singleton Oil Field Enhanced Oil , Recovery (EOR) Project in Banner County, Nebraska. Located in the north-eastern portion of the prolific Denver-Julesburg Basin (the “DJ Basin”). The properties were acquired for an entire consideration of US$100,000. Elk estimates that Devon’s total investment in the acquired properties to be in excess of US$10 million. The properties consist of:
- All of Devon’s oil and gas leasehold interests in Banner County, Nebraska covering 9,738 gross acres (5,987 net acres);
- Two oil exploration wells – one vertical well, Opis 1P and one horizontal well, Opis 1H – both of which have been completed as oil producers; and
- All of the oil production, processing facilities, storage and oil truck load-out facilities.
The properties are essentially new with the leases first being acquired in 2012 and the Opis 1P well drilled and completed in early 2013 and the Opis 1H well drilled and completed in late 2013 with production facilities constructed shortly thereafter.
In undertaking the pre-development technical review of the Singleton EOR Project, the company had identified that in the southern portion of the Singleton Oil Field some of the oil production was being contributed soley from a better developed lower Muddy Formation interval known as the J3 sand. This was later confirmed by Elk prior to purchase during detailed technical due diligence of the Devon Oil Properties, and analysis of drilling results from the Opis 1P and Opis 1H exploration wells. The shallow depth and relatively thick section of J3 sand present in the Opis 1P and Opis 1H wells contained oil pay. Devon’s primary objective in drilling these two wells was the deeper (and after production testing) high water cut non-commercial Mississippi Limestone oil play. After production testing this deeper unconventional Mississippi Limestone oil play, Devon determined that the play was not economic due to a high water cut in the wells. The J3 oil sands were not tested and are now behind casing in these 2 suspended wells. With the added bonus of newly installed oil production facilities at the Opis 1H production well we have the flexibility to support the Singleton Unit EOR Project or renter the Opis 1P well and production test the J3 oil sand.
Elk estimates that the Devon Oil Properties contain approximately 3C contingent oil resources of 2.5 MMbbls and 78 Mbbls of 2P oil reserves net to Elk. The acquisition represents a 25-35% increase in the company’s current 3C contingent oil resources.
Subsequent to year end your Board has approved a budget of US$195k to start an appraisal production test of the J3 sand in the Opis-1P well to test its oil production potential over a long term oil production test. In addition, water injection will be restarted in the Singleton Unit at the W3 water injection well.
The company believes if appraisal production testing of the Opis-1P and Opis-1H well can be established, oil contained in the J3 sand in the acreage extending from the southern portion of the Singleton Oil Field may be able to be developed.