U.S. Oil & Gas plc was formed to exploit the potential for substantial conventional oil and gas finds in onshore North America, using the most advanced technology available.
The exploration acreage
Through its wholly owned subsidiary, Major Oil International LLC, US Oil holds a federal lease acreage of 73,725 acres in Hot Creek Valley, Nevada, USA. The Valley is 35 miles west of Railroad Valley, a location that has produced more than 40 million barrels of oil to date. Analysis of oil flowed by the Company’s two wells show it to be most likely from the same Chainman Shale source rock as Railroad Valley.
Both the Company’s wells in Hot Creek Valley, Eblana-1 and Eblana-3, flowed high quality oil to the surface (API 28.5-34.5) but were not deemed commercial. However, data collection and modelling have continued, and targets of considerably higher potential are currently emerging. Downhole well data from Eblana-1 and Eblana-3, as well as geomagnetic, geochemical and seismic data, have indicated two strong plays on the Company’s leases, one to the west and the other to the east.
The East Play
Prospect assessment is furthest advanced for the Tertiary East Play, a likely analogue of Railroad Valley’s producing Trap Spring field. Promising drilling targets have been identified by analysis and interpretation of well data from Eblana-1 and Eblana-3, four reprocessed 2-D seismic lines, gravity, magnetic and geochemical data, as well as VSP data from Eblana-1 along with energy absorption analysis. The area of interest is significantly updip of the Eblana-1 and Eblana-3 wells and is on leases acquired by the Company in 2018.
The Company is preparing applications for permits to drill three wells – Eblana-8, Eblana-9 and Eblana-10. Eblana-9 will be the first well drilled. If commercial, the other wells will follow. Planned well depths are approximately 5000ft.
The West Play
Subject to funding and regulatory permissions, the Company expects to drill a further well or wells to the west of its acreage, where the current basin model indicates a structural analogue of Railroad Valley’s Grant Canyon field. Grant Canyon historically included the most productive onshore well in the USA, flowing at over 4,000 bopd. In this area, the Paleozoic strata rise to relatively shallow depths, currently estimated to be 3,500 ft. or less, potentially allowing the development of low-cost wells. Intensive data analysis and modelling efforts are ongoing, and planned data collection includes seismic surveys to confirm structural aspects of identified leads.
On February 2, 2017, on the basis of all available data, including Vertical Seismic Profile (VSP) data collected from the Company’s Eblana-1 well (processed by Halliburton), and after a review of petrophysical parameters, Baker Hughes Inc. reported a Best Estimate for Contingent Recoverable Oil (20% recovery factor) of 206.6 million barrels.
On completion of currently planned seismic and other studies, and in the light of a revised oil system model, resource estimates will be subject to revision and may decrease or increase accordingly.