(“US Oil” or the “Company”)
U.S. Oil & Gas Plc, the oil and gas exploration company with assets in Nevada, makes the following announcement:
Halliburton VSP data processing and analyses complete.
Baker Hughes structural modelling and additional analyses underway.
Of two previously identified Tertiary structures in range of VSP, both confirmed.
Direction of ‘updip,’ source rock, trap, seal and reservoir rock confirmed.
‘Anomaly F,’ previously identified by geochemistry, confirmed as a large structure.
Eblana #1 re-entry plan confirmed.Primary targets are those associated with Anomaly F to the east.
Palaeozoics rise sharply to the west, modelling continues.
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.
The parametric wavefield separation technique was applied to decompose the wavefield using Vz and Hr components. Following wavefield separation, a 5-point median filter was applied to enhance the separated up-going P-wavefield in the shot domain. Static correlation was completed utilising the Kirchov Method. Well control data from Eblana 1, Apache well 302, 310 and Trap Springs in Railroad Valley was included in the analysis as well as additional 2D seismic lines.
Preliminary VSP findings
Of five potential hydrocarbon-bearing structures previously identified in the Company’s Hot Creek Valley lease area by geochemical, gravity and geophysical survey, two were within range of the current VSP study. Both potential structures have been confirmed. The direction of updip is clearly eastwards for the confirmed structures. Source rock, trap, seal and reservoir rock are confirmed.
On May 23, 2014, the Companyreported the results of a geochemical survey that found extremely high values indicating hydrocarbons 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 any structure or structures underlying the chemical signals could not be answered at that time. The present VSP study now confirms Anomaly F relates to a large Tertiary structure.
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. Work analysing and modelling the Palaeozoics data continues.
To save time while the Halliburton VSP study was ongoing, the decision was made to concurrently commission Baker Hughes to create a structural model and carry out additional analyses. All the relevant data have been made available to Baker Hughes and that work continues. The primary purpose of the structural modelling is to increase the precision of drilling operations. In addition, a developed structural model could help interpret amplitude versus offset (AVO) data presently uninformative due to the complex geology.
Eblana #1 re-entry and targeting
All results so far confirm that re-entering Eblana #1 is the optimal strategy. Two potential targets have been identified within Anomaly F. Both are within the range of displacement drilling from Eblana #1.
Further analysis, modelling and volumetrics
Final decisions on targeting will be made after further analysis of the VSP and other data, and when structural modelling is complete. Currently, a costing exercise is being carried out covering the potential Tertiary targets and the Palaeozoics, and discussions with drilling companies are underway.
Concurrent with structural modelling, estimates of original oil-in-place (OIP) are being revised incorporating the results of the latest studies.
Drill costs , funding and strategy
The Company can confirm that it is sufficiently funded to drill the Tertiary zones to the east identified as promising targets by both the Eblana #1 drill results and the VSP studies. In addition, the Company is considering a further capital raise for some or all of the following: contingencies, working capital, an additional drill to penetrate the Palaeozoics, and a possible stock market listing. Drilling the Palaeozoics may require further regulatory permissions, although these are expected to take the form of sundry notices, and are not anticipated to cause significant delay.
CEO Brian McDonnell said:
“We are tremendously excited and encouraged by what the data is showing us. Our team has worked intensively with both Halliburton and Baker Hughes to process, analyse and model an enormous amount of data, deploying a battery of the most advanced techniques. At every stage, the results of our earlier studies have been confirmed, a tribute to the Company’s historically systematic and painstaking approach to exploration. We are now in the phase of structural modelling and discussions with drill contractors, while considering the various options open to us for our anticipated re-entry of Eblana #1.”
THE DIRECTORS OF THE COMPANY ACCEPT RESPONSIBILITY FOR THE CONTENTS OF THIS
Neither this announcement nor the information contained herein constitutes an offer or solicitation by U.S. Oil and Gas Plc for the purchase or sale of any securities nor does it constitute a solicitation to any person in any jurisdiction where solicitation would be unlawful.
For further information contact:
Brian McDonnell, Chief Executive Officer +353 (1) 631 9022
Alexander David Securities Ltd – Corporate Finance Adviser
David Scott +44 (0) 20 7448 9820
James Dewhurst +44 (0) 20 7448 9820
Email: [email protected]
Definitions: The terms ‘Reserves’ and ‘Contingent Resources’ are as defined in the ‘Petroleum Resources Management System’ of the Society of Petroleum Engineers.
About U.S. Oil & Gas:
U.S. Oil & Gas plc is an oil and gas exploration company with a strategy to identify and acquire oil and gas assets in the early phase of the upstream life-cycle and mature them. The Company’s
main asset is in Nye County, Nevada where it holds the entire share capital of US-based company, Major Oil International LLC (“Major Oil”). Major Oil has acquired rights to exploration and development acreage in Hot Creek Valley, Nye County, adjacent to the oil and gas rich Railroad Valley area of Nevada, both of which are part of the Sevier Thrust of central Nevada and western Utah, USA.
In a May 2013, an independent Competent Person’s Report (CPR) by Forrest A. Garb & Associates (FGA) of Houston, Texas, estimated 19.2 million barrels Contingent Resources (C50) for a portion of the Company’s lease area in Hot Creek Valley Nevada. Since then, the Company’s stated intention has been to achieve Reserves status for some part of those estimated Resources.
For further information please refer to our website at: www.usoil.us