VSP and Structural modelling

VSP and Structural Modeling – Background
From the beginning of its exploration programme in Hot Creek Valley, US Oil recognised both the potential for major discoveries and the special difficulties associated with Nevada geology.  Complex faulted structures, complex lithology, unusual fluid relations, unconventional reservoir rocks and difficult downhole conditions make for a challenging operational area. The Company’s approach to these challenges has been systematically to reduce exploration risk by carrying out multiple surveys and applying advanced technologies.

Most recently, the Company contracted Halliburton to carry out a Vertical Seismic Profile (VSP) survey based on US Oil’s Eblana #1 discovery well, and Baker Hughes Inc. (BHI) to carry out structural modeling based on all the available data including VSP. The purpose of the structural modeling is to reduce risk as far as possible before the Company drills its next wells. The ultimate objective is to reduce the drilling risk, flow the well and raise a portion of the Company’s Contingent Resources to Proved Reserves.

Halliburton Vertical Seismic Profiling (VSP) – data collection
In June 2016, Halliburton conducted a zero-offset VSP (ZVSP), two walk-away (WAW) VSPs, one offset VSP and two mini-WAW VSP surveys for 8000ft in each direction from the Eblana #1 well. The VSP acquisition survey was run using a 30-level Geochain™ tool string. For depth correlation, a gamma-ray wireline tool was attached to the tool array to check the geophone depth locations and allow for corrections.

Baker Hughes structural modelling
The following datasets were analysed and integrated:
VSP
2D Seismic
Well logs
Gravity
Geochemical
Passive seismic
Short angle data (integrated with AVO)
AVO and anisotropy results

Preliminary conclusions
BHI has identified four possible hydrocarbon-bearing upside Tertiary structures and stratigraphic traps, all of which are potential targets. Two correspond with zones from which Eblana #1 flowed oil in 2013. The Company currently estimates that all four of the identified structures can be penetrated in a single drilling operation.

The Tertiary structures correspond to a faulted anticline, and/or stratigraphic traps, that deepens toward the W-SW and grows in the E-S direction. Most of the Tertiary faults identified are of extensional character with a strong compressional influence and an overall orientation NW-SE, N-S and N-SW. It is thought that other fault systems exist, possibly of minor size and oriented in an opposite direction. The structural closure of the Tertiary reservoirs may be represented by a stratigraphic factor (facies variation) or the seal of the current seismic interpreted faults, as well as unidentified minor faults and sets of fractures typical of this type of basin.

In addition, BHI identified two possible hydrocarbon-bearing upside deep Palaeozoic structures: a faulted anticline in the Centre-East of the Block that apparently constitutes the upside structure that surrounds the Eblana-1 well and a second anticline structure in the East that has a clear structural closure. The shallower Tertiary reservoirs are identified and defined with a higher confidence level than these deeper Palaeozoic horizons. The lateral and vertical oil migration path has been identified from North and South Basins toward the structural high within the US Oil block.

Regional interpretation of the 2D seismic data correlates well with the VSP data. The depth structural model interpreted with the seismic data honours the geologic and tectonic setting of the Hot Creek Valley Basin.  AVO analysis was uninformative due to geologic complexity.

Target distances
Potential Tertiary target distances (horizontal) from Eblana #1 to the structures of interest range from 1,000ft to 4,000ft.

The Palaeozoics
Analysis of the VSP data has revealed that the Palaeozoic stratum in the area of Eblana #1 lies at significantly shallower depth immediately to the west.