The Eblana-1 well
The Eblana-1 exploration well, drilled in 2013 by U.S. Oil’s wholly owned subsidiary Major Oil International LLC, identified nine large potential oil reservoir intervals and associated high fracture zones before reaching its target depth of 8,550 feet. Testing confirmed two producer zones, approximately 150 feet cumulative net pay, and identified light, sweet oil of 33 and 28.5 API. Oil produced had a high water cut and did not flow at commercial rates. The discovery was confirmed by an independent Competent Person’s Report prepared by Forrest Garb & Associates.
VSP and structural modelling
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.
In 2016, 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 modelling based on all the available data including VSP.
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:
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 with zones from which Eblana-1 flowed oil in 2013. 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. 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. AVO analysis was uninformative due to geologic complexity.
Analysis of the VSP data revealed that the Palaeozoic stratum in the area of Eblana-1 lies at significantly shallower depth immediately to the west.
The Eblana-3 well spudded at 13:30 PST on April 17th 2018 and drilled vertically to a depth of 8,200ft. The well was updip of the Company’s discovery well Eblana-1, and on the same structure. Wire-line and mud log results were highly encouraging, identifying multiple potential hydrocarbon zones in the Tertiary. Oil of API 34.5 flowed to the surface.
During completion operations, perforations targeting potential producer zones with good permeability and porosity appeared to suffer from blockage by volcanic ash and tuff. Attempts to clear the perforations by pumping and establish consistent flows of oil with low water cut were unsuccessful. A plan was developed to flow other, low permeability zones by fracking.
Between September 2018 and March 2019, the Company developed a detailed fracking plan for Eblana-3 and carried out water quality and other studies as part of the permit application process. The Nevada Division of Minerals duly awarded the permit on April 26 2019. However, significant developments in the Company’s understanding of the oil system in Hot Creek Valley, driven by additional data collection and intensive modelling activity, led the Company to decide not to proceed with fracking Eblana-3, in favour of drilling a further well or wells most likely in the western part of its acreage.