Operations

Hot Creek NevadaMapValley & Eblana #1

The Eblana #1 exploration well, drilled by U.S. Oil’s wholly owned subsidiary Major Oil International LLC, identified nine large potential porous oil reservoir intervals and associated high fracture zones before reaching its target depth of 8,550 feet on 26th May 2012. Testing confirmed two producer zones, approximately 150 feet cumulative net pay, and identified oil of 33 and 28.5 API.

A May 2013 an independent Competent Person’s Report by Forrest Garb & Associates (FGA) estimated Net Prospective Resources of 282.8 million barrels of Oil-In-Place (Best estimate) for the whole lease area and 19.23 million barrels of recoverable Contingent Resources (2C) from the area around the Eblana #1 well.

Geochemical and VSP studies
On May 23, 2014, the Company reported the results of a geochemical survey finding extremely high values to the east of the Eblana #1 well. This feature was designated ‘Anomaly F’ and was by far the largest anomaly so far identified, covering an area of approximately 4,400 acres or 18 sq km. However, although hydrocarbons were detected, questions about what if any structure underlay the chemical signals could not be answered at that time.

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 the Eblana #1 well. Of five potential hydrocarbon-bearing structures previously identified in the Company’s Hot Creek Valley lease area by geochemical and geophysical survey, two were within range of the current VSP study.  Both potential structures were confirmed, and Anomaly F can now be seen to relate to a large Tertiary structure or structures.

Structural modeling
The Company contracted Baker Hughes to create a structural geological model and carry out additional analyses using all the relevant data, including VSP data.  The purpose of the structural modeling is to increase the precision of drilling operations.
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

BHI identified four possible hydrocarbon-bearing upside Tertiary structures and stratigraphic traps, all of which are potential targets. Two correspond to 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.

The Palaeozoics
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.

Permits and drillling
The Company has been awarded two Permits to Drill by federal and state permitting authorities for further wells in Hot Creek Valley, Nevada, USA. A third application has been submitted and is currently in process.The required bonds have been lodged for the two permitted wells.

In order to make rapid operational progress, the Company is currently moving ahead with preparations for drilling Eblana-3 and Eblana-6, both vertical wells.