Basin model and the oil system

Basin model and oil system

The Company’s latest basin model supports the view that Hot Creek Valley is part of the same basin as adjacent Railroad Valley, and is its mirror image. As in Railroad Valley, the source rock is Chainman Shale. Volcanic activity in the centre of the basin has created the ‘kitchen’ and the oil is migrating outwards to the rims of the basin.

In Hot Creek Valley, the migration is westwards at Paleozoic strata and turns eastwards at Tertiary levels. The current picture indicates highly prospective areas on the Company’s acreage both to the west and to the east.

The western play
The Company believes the western play is strongly analogous to the Grant Canyon Field in Railroad Valley. Grant Canyon historically included the most productive onshore well in the USA, flowing at up to 4,300 bopd. Based on geomagnetic, geochemical and existing seismic data, as well as downhole data from Eblana-1 and Eblana-3, the prospectivity of the western play is highly encouraging. In this area, the Palaeozoic strata rise to relatively shallow depths, most likely 3,500 ft. or less, potentially allowing for 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.

The eastern play
A Tertiary play on the Company’s eastern leases is also considered highly prospective and appears to be analogous to Railroad Valley’s Trap Spring field. 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.