dalta presentation david j. steyaert, impact energy … · 2012. 7. 30. · our general...

Impact Energy Resources, LLC 1

DALTA PRESENTATION David J. Steyaert, Impact Energy

Resources, LLC . July 2012

Who am I? • David J. Steyaert, Sr. – Currently Petroleum Geologist and

Owner of Impact Energy Resources, LLC a small oil and gas prospect generation/ consulting firm in Denver since 1997.

• Professional Petroleum Geologist, 30+ years industry experience. Twenty four plus years unconventional resource play experience with coal bed methane in San Juan, Uinta and Midcontinent; tight gas sands throughout Rockies; tight oil plays in the Green River-Wasatch in Uinta Basin; Niobrara Shale in Sand Wash, North-South Park, Powder River, and Denver- Julesburg Basins; and Bakken - Threeforks and Mississippian carbonates in the Williston Basin. International exposure in west and north Africa and eastern Europe. Successful track record of project management, oil and gas prospect generation, drilling and operations geology, and project marketing and execution.

• M.S. Degree Geology from University Missouri-Columbia, Columbia, Mo. • B.S. Degree Geology from University Missouri-Kansas City, Kansas City, Mo. • Affiliations: AAPG; RMAG; Wyoming Professional Geologist.


Our General Presentation Outline • Introduction • What are some of the things you should know about our industry. • Some traits of successful Geologists and explorers. • The Geologist’s tools of the trade. • Oil and Gas Plays- What are they? • Prospects- What are they? • Game changing technologies for Geology.

– Our Laboratory! • Elements of an Oil and Gas Accumulation.

– Stratigraphy – Reservoirs and Source Rocks. – Traps Yesterday and Today!

• Stratigraphy and why it is important for you! • The Resource Pyramid. • Rocky Mountain Resource Plays. • Stratigraphy of the Niobrara.

• Buck Peak Production Example. • Stratigraphy of the Bakken – Three Forks

• High Savannah Prospect Example • Summary



What is the First thing you know?

Jed’s a Millionaire!


Now headed to Beverly Hills- There must have been a Division Order and Title Analyst involved in there somewhere or Jed would have not gotten paid.

What are some of the things you should know?

• Our business is not quite like the Clampetts any more. It never really was for me and probably not for you!

• Our industry is made up of multiple disciplines and it takes them all working together as a team to find and produce economic oil and gas.

• Best geology in the world is worthless unless you own the leases- “No lease-No Grease”. In my career I have been constantly reminded of this fact.

• Your group provides tremendous value to our industry and as a royalty interest owner- THANK YOU!

• You need to know something about the nature of geologists- Oil is found in the minds of men and women who have a sound fundamental background in Geology.

• We know oil is found in specific areas under specific geologic conditions. Mostly in or nearby depositional basins that contain abundant source beds to generate oil and gas, reservoir rocks to host and carry the oil and gas to a nearby trap. Traps may either be Conventional (stratigraphic or structural) or what we call Unconventional (Continuous). We will return to all this in a moment.

• Geological fieldwork forms the basis for all studies of sedimentary rocks and petroleum reservoirs, source beds and hydrocarbon traps!


Traits of successful Geologists/ Explorers!

• Some key traits include: – Enthusiastic and highly motivated – Can do attitude! – A sense of optimism. – Be able to think. – Be able to solve complex problems. – Be able to communicate. – Highly Creative mind- Able to assemble and synthesize lots of different types of data and

create a coherent picture. – Honest . – Must have integrity. – Team player – Big Thinker – Takes just as much effort to find a small accumulation as a large one. – Tenacious – Don’t give up. Failure happens for a variety of reasons some of which you can’t

control. – Intelligent - You need to be able to understand what you are looking for and have the tools to

succeed. – A person who elevates the level of performance of those around him or her! – A Great Salesman – maybe this should be at the top of the list. – It is good to be Spiritual. Lucky. It is hard to deny divine intervention when you work for

yourself because so many good things happen beyond your control.


Geologist’s Tools of the Trade

• The chief database for the petroleum geologist is the pool of literally thousands of historical wells that have been drilled. The well records, sample and core descriptions along with electrical and borehole geophysical logs provide the basis for subsurface mapping throughout the Rockies and around the world.

• This data allows us to define source, reservoir, and trap mechanisms for both conventional and unconventional oil and gas plays and prospects.

• Drill stem tests and production tests for individual wells and formations allow geologists to look at subsurface fluid dynamics and trace the oil through the rocks.

• Production data obtained from governmental agencies or service companies. • Field studies published by trade organizations. • Geologic studies conducted by government agencies. • Satellite imagery. • Historical 2D and 3D shelf seismic data. • Aeromagetic and gravity surveys. • Geochemical studies (surface and subsurface). • A fast computer with robust mapping package is paramount!


So What is a Play? – Geologists and Landmen always talk of Plays!

• A play is the complete package of geologic factors or elements necessary for an active Petroleum System that occurs across a wide geographic area in a depositional basin. – Essential elements of a play includes: the presence of

source and reservoir rocks; traps; seals; burial history; subsurface temperatures sufficient for maturation and oil and gas generation and migration. All elements need to be placed in geologic space and time such that oil and gas accumulations may occur. Plays result from regional geologic studies over long time frames (we stand on the shoulders of those who have gone before us).

– A play is also a series of related prospects!


So What is a Prospect? Geologists and Landmen are big on these too!

• A prospect is, in my opinion, a geologic lead, concept or idea where you own an economic interest e.g. Leases, Minerals, or Royalty. If the leases are not available or you cannot obtain an interest in the idea then the idea goes back to the lead pool or geologist’s inventory! We usually have a large pool of ideas!

• A prospect is also a geologic lead or concept that can make you or your company a profit, sometimes by accident ( see Jed above)!

• A prospect or series thereof is a subset of a play (see above).


Geology – Today’s Game Changers!

• Horizontal Drilling - been around since early 90s. • 3D Seismic – better imaging of the subsurface

reservoir package and steering horizontal wells. • Multi-stage completion- Engineers are enhancing

the available porosity and permeability of tight oil and gas reservoirs across the Shale Basins of the US; e.g. the Niobrara Shale, Bakken and Threeforks.

• Our ability to learn, innovate, adapt and survive. – With each new hole we drill we are always learning in

this business!


Our laboratory- Unconventional Resource Shale Plays


Rocky Mtn Region Oil and Gas Map – 15 Basins with established shale resource play production.

Elements of a Oil and Gas Accumulation

• Favorable Stratigraphy in a depositional basin that includes: – Reservoir Rocks (sandstones, limestones, dolomites, and shales)

• Porosity and permeability sufficient to carry and hold hydrocarbons and transmit oil and gas. (Gotta have holes that are connected!)

– Source rocks • Deposited in anerobic (low oxygen), stagnant conditions. • Rich in total organic matter (TOC) such as dark colored shales, limestones and

dolomites. • Which have experienced burial and thermal history sufficient to generate oil and

gas by the conversion of the organic matter to kerogen and ultimately to oil and gas!

• Trap mechanisms- Containers for oil and gas in the subsurface! – Conventional- old style or yesterdays objectives!

• Stratigraphic – porosity and permeability pinch-outs. • Structural – domes, anticlinal folds, and fault traps

– Unconventional – new style- Today’s objectives • (Basin Centered Continuous Accumulations)


What is Stratigraphy and why is it important?

• Stratigraphy is a fancy science term for rock strata that describes how rock layers form, their age, geographic distribution, physical character, and chemical composition. Stratigraphy is defined in the field at the outcrop level by the geologist. Outcrops are a 3D exposure of the rocks on the ground. – Formations are the basic unit of Stratigraphy utilized for mapping by

the geologist. Formations have definite and similar characteristics, widespread, and mappable over a wide geographical area. These formation names (reservoirs )are what you see in agreements.

– Each Geologic Formation is described in a specific area and tied to what geologists call “Type Localities”. A formation is named for the type locality on the ground e.g. a nearby city or landmark first and then its dominate lithology. An example would be the Niobrara Shale.

– A geologist’s ability to describe an outcrop of geologic formations and its structure is related to his or her ability to understand what he or she sees.


I-70 Road cut Outcrop Example


Stratigraphic Columns

Stratigraphic Columns like one to left are the summation of Formation Stratigraphy for a given basin or area. They show the layering of geologic formations. Stratigraphic Columns are available for all basins and are useful to understand formation names used in reports and agreements.


Stratigraphy (Cont’d)

• Formation names are what you see on Division Orders and Title Opinions and spelled out in Farm-out Agreements and other documents to be recorded in the courthouse. The formation name objective should be included on your documentation when you draft agreements so that the interest is clearly specified as to what depth and what formations are covered. – The following is an example TITLE MEMO illustrating the need to add

formations names to clarify the agreement. I would also recommend adding a type log too to further specify the intent.


Stratigraphy (Cont’d) - Agreement Example

• What is the reference formation? We have a depth but nothing else.

• What are the formations above the reference depth? What are the formations below the reference depth?

• This issue pertains to all of your agreements!


Stratigraphy (Cont’d) • Same problem as

previous example. A depth is listed but without supporting documentation of Formation name and reference log.



Elements Cont’d – Oil and Gas Trap Mechanisms Conventional - Yesterday Unconventional - Today

Gas rises above oil and oil above water. Would expect down dip water leg!

•Continuous oil and or gas accumulation •May have water transition on top of oil or gas with no down dip water leg! •Reservoir and source rock adjacent or interbedded. •Short distance migration •Reservoir exhibits Low permeability and porosity. Great for horizontal drilling. •Trap boundaries ill defined- diffuse.

Putting it all together- Resource plays

Basin margins Basin margins Basin center


RESOURCE PYRAMID

Yesterday

Today


ROCKIES - LOTS OF DRILL HOLES OUT THERE!

Since the middle- late 1800s (150 years) there has been over 390,000 historic wells drilled in the Rocky Mountain Region in search of Oil and Gas. Red = Gas Wells Green = Oil wells Gray = Dry Holes


38,841 Current Well Location and/or Permits in Rockies. Most all are horizontal!


As of May 2012 there were over 22,866 horizontal and or directional wells with at least a 1000 ft lateral drilled in the Rockies. Most all completions today are horizontal.

Legend

TODAY IT’S MOSTLY HORIZONTAL!


Rocky Mountain Region Main Resource Shale Plays

• Niobrara Shale – Denver Basin, Sand Wash Basin and Powder River Basin. • Mowry Shale – Powder River Basin, Wind River Basin and Big Horn Basin. • Mancos Shale – Piceance, Uinta, San Juan • Gothic Shale Paradox Basin • Cane Creek Shale – Paradox Basin • Bakken – Williston Basin • Threeforks – Williston Basin • Phosphoria- Greater Green River, Wind River, Big Horn Basins


Rocky Mountain Region Productive Shales

At Least 15 Productive Shales Spread Over 14 Different Basins. This suggests a lot of future growth in number of wells drilled and volumes of oil and gas produced!

Legend


• Type location is at mouth of Niobrara River where it flows into the Missouri river in Knox County of eastern Nebraska. At type location it forms cliffs 90-100 ft high. Dominate lithology at the type location is a gray, calcareous shale or marl that weathers light buff.

• The type location was defined by the Meek and Hayden Survey of 1862.

• Age Santonian to Campanian.

Let’s Talk Niobrara Shale

KNOX COUNTY

Type Location in Niobrara State Park


Stratigraphy of the Niobrara Shale Resource Play

Stratigraphic Columns show geologic formations and the bounding formations. Hatched areas show areas where rocks are missing either through erosion or non-deposition. Stratigraphic Columns are available for all basins.


TIME STRATIGRAPHY (Chrono)


Paleogeography during Niobrara Time ~85 MY Ago


Open Ocean

Open Ocean

East West


Niobrara Shale Producing Wells

• Productive over multiple Basins.

• Approximately 18, 696 Niobrara Historical Producing wells and its Equivalents (mostly all old vertical wells).

• Considerable future drilling.



Sonnenberg, 2011

Niobrara Stratigraphy Denver Basin Stratigraphy

A -Chalk

B-Chalk

C-Chalk

Marl

Marl

Marl

The Niobrara is comprised of 4 chalk benches interbedded with 3 organic rich marls. The A,B, and C chalks are the main reservoir targets carrying high resistivity where productive in the Denver Basin. The intervening marls are known to be thermally mature oil and gas generating source rocks .

D-Chalk


Adapted from Bonanza Creek Investor Presentation 07-2012

Future Drilling Objectives

Niobrara: Existing Objectives

Denver Basin Development



A couple of examples of plays and prospects follow on the next few slides.

Western Colorado Buck Peak Field Niobrara Production Example


Western Colorado – Tectonics and Niobrara Producing Fields

• Regional – Located in heart of the

Cretaceous age Western Interior Seaway.

– Niobrara source and reservoir package ranges from 600 to over 1200 ft thick across the area.

• Reservoir is a fractured shaly limestones within 3 benches.

• Source rocks are interbedded with limestone units and generate oil and gas.

• Niobrara is a gravity drive reservoir

– Traps are primarily conventional faulted anticlines and noses.

– Historical production across the area is heavily fracture controlled.


Vincelettei and Foster 1992

• Regional Stratigraphy Of Northwest Colorado and SW Wyoming

• Note: Stacked multiple oil and gas reservoirs.

• Buck Peak Field in Moffat County Produces from Niobrara Shale


BUCK PEAK FIELD Discovered in 1956.

• Niobrara Shale is a gray – black, carbonaceous, calcareous, speckled shale with fractures filled with calcite.

• Niobrara is 1200 feet thick with multiple benches that carry oil and gas.

• Oil is 39 Degree API Oil


Structure top Niobrara in 1961

Cummins1961

Buck Peak Field - Cumulative Production and Oil Bubble Map

• There are 11 wells in the field with cumulative oil production ~ 4.8 MMBO and 7.9 BCFG.

• EXISTING PRODUCTION is all from the Niobrara.

• All wells to date are vertical completions.

• Drive mechanism is gravity drainage.

• Production is water free.


Primary Drainage Areas

New Drill Drainage Areas

Primary Infill Locations

Reprocessed 2D Seismic

Gulfport

New Drill Permit

HRM Loc

Quicksilver

Quicksilver

Shell


Map Legend

History of Involvement My partner, Dave Laramie and myself have working the Buck Peak for the past 7 years and jointly own a company called Buck Peak, LLC. We have bought and sold several thousand acres in the area. In 2008 we sold down a portion of our interest to Premier Energy Partners, owned by Fred Witsel, another Petroleum Geologist here in Denver. Together Premier and Buck Peak are seeking joint venture partners to develop 640 net acres along crest of the structure in Sec. 25; T6N; R90W. The land is favorably located amongst macro fractures inside the field. We feel we have 4 additional locations with recoverable reserves of 2 MMBO.

Buck Peak Niobrara Historical Production All Vertical wellbores

WELL Location GAS OIL BOE WATERNoland #1-15 SWSE 15 3,402,002 1,552,705 1,892,905 469,387Voloshin #1 NWNE 25 784,081 1,107,152 1,185,560 1,676Kowach #1-9 SWSW 9 1,307,041 553,194 683,898 38,576Voloshin Morton #1-8 NESE 8 126,263 610,096 622,722 994Kowach #1 NWNW 25 775,490 205,103 282,652 981Levkulich #1-15 SESW 15 644,279 189,897 254,325 12Kowach #2 * SENW 25 0 242,111 242,111 none reportedFederal #1 SESE 23 306,096 136,687 167,297 6Craig #1-7 NENW 7 115,629 91,440 103,003 491State #1-16 inj * SWNE 16 12,800 92,292 93,572 491#34-23 HD - horizontal NWSE 23 484,843 0 48,484 none reportedTotals 11 7,958,524 4,780,677 5,576,529 512,614

Niobrara EUR Range Well Count Prob GAS OIL BOEWells > 1.0 MM BOE 2 18% 2,093,042 1,329,929 1,539,233Wells > 500 K BOE 2 18% 716,652 581,645 653,310Wells > 250 K BOE 2 18% 709,885 197,500 268,488Wells < 250 K BOE* 5 45% 302,189 112,506 142,725

Weighted Average 11 100% 777,282 434,607 512,335* Gas volumes not included in averages


BOE Conversion 10:1

Buck Peak Field Structure Top Niobrara Shale

• Activity Map

– Pink Locs = New Permits. – Quicksilver discovery Well

• Structure map suggests 2,500 oil

column. • Not all fault trends have been

developed for Niobrara. • Other horizontal targets above and

below Niobrara include: Mancos shale; Frontier SS; Mowry and Muddy SS.

• A lot of future development both for Niobrara and secondary targets.


Gulf Port New Drill


Impact Energy Resources, LLC

621 17th, Suite 1630 Denver, Co

303-592-1030

Structure Top Niobrara Section 25 Topo Map

4 Niobrara Development wells. Est . EUR 2 MMBOE

Gulfport Energy

SWEPI

Gulfport Energy

DISCOVERY WELL Quicksilver Stoddard 33-30 IPF 114 BOPD+360 MCFGPD+0 Wtr Niobrara Cased hole perfs 6836-8136 ft 2spf, After SDFrac w/ Gel Butane . First Prod. 12/07/2011 4 additional wells staked on 40 acre spacing.

Quicksilver

Samson Resources

HRM

BUCK PEAK PROSPECT: Current Activity Map. Prospect within a Play

Lots of Development room for Niobrara and development of other reservoirs.


Early Success!



621 17th, Suite 1630 Denver, Co

303-592-1030

DISCOVERY WELL Quicksilver Stoddard 33-30 IPF 114 BOPD+360 MCFGPD+0 Wtr Niobrara Cased hole perfs 6836-8136 ft 2spf, After -Sdfrac w/ Gel Butane First Prod. 12/07/2011 4 Development Wells Staked


Williston Basin– High Savannah Prospect - Bakken - Threeforks Example. Roosevelt and Sheridan Counties, Mt.


TYPE BAKKEN WELL H.O. Bakken No. 1 Well, Williams County in SW NW of Section 12; T 157W; R95W from depths 9,615- 9720.

• Type Location or section for the Bakken is in the subsurface at the Amerada Petroleum Company H.O. Bakken No. 1 Well located in Williams County in SW NW of Section 12; T 157W; R95W from depths 9,615- 9720 ft (Nordquist, 1953).

• Bakken originally was applied to the basal Mississippian clastic zone in Northern Montana and North Dakota. In the type well it is described from the top as: 20 feet of shale, black, very slightly calcareous; 60 feet sandstone, light-gray to gray – brown, very fine-grained, calcareous, interbedded with minor amounts of gray-brown limestone, 25 feet; shale, black fissile, very slightly calcareous.

• Bakken is considered to be Devonian (?) and Early Mississippian in age. It is un-conformably overlain by Lodgepole and underlain by Three Forks Formation.

• Additional reference log located in Sec. 6; T141; R94W Socony Vacuum Oil

Co. C. Divorak No. 1 along south side of basin.

Let’s Talk Bakken


Type Log For Bakken in Subsurface of Williston Basin Amerada Petroleum H.O. Bakken

Bakken depths 9,615- 9720

LAND

Open Ocean

Paleogeography of Devonian to Early Mississippian ~359 MY Ago.

Williston Basin is an intracratonic basin with arm opening into Canada. By early Mississippian Basin was restricted and isolated from open sea.

52 Impact Energy Resources, LLC

Williston Basin: Thickness map of Cretaceous to Ordovician Rocks

• Today the basin is a giant bowl with mature source rocks in middle of the bowl.

• The Middle Bakken and Threeforks plays are being developed in middle of basin outward in all directions.

• We are learning and adapting. Better completion design is increasing reserves per well.

• Play is developing inside out !


• Horizontal plays include Threeforks,

Middle Bakken and Mississippian Ratcliff.

Lots of secondary reservoirs


Williston Basin Petroleum Systems

Bakken Threeforks Play


Adapted from NDGS

• Matrix porosity – Primary – Secondary

• Fracture porosity – Related to Tectonics

• Regional • Salt tectonics

– Related to HC Generation

Middle Member Bakken Porosity

Adapted from NDGS



621 17th, Denver, Co 303-592-1030

Bakken Shale Petroleum System. Maturity and water expulsion and accumulation in Middle Bakken and Threeforks Reservoirs

Impact Energy Resources, LLC 57 Meissner1978


Bakken System and Play Development

Bakken Shale Petroleum System in Williston Basin. Note: East dip of Maturity line in Basin.


Meissner1978

Bakken – Threeforks System

• Over-pressured - Continuous accumulation. • Effective interbedded source reservoir

package • Micro and macro fractures present in

reservoir. • High volumes of oil generated – 300-400 BBO

– Estimated 10% recoverable ~ 30-40 BBO

• Completed well IP rates 300 – 2000 BOPD – Gravity of the oil ranges from 39- 46 API


Drilling Activity: Bakken-Threeforks Play

• 5,406 Permits and Starts (pink dots) within interior of basin as of May 2012.


HIGH SAVANNAH PROSPECT (WITHIN BAKKEN - THREEFORKS PLAY)

• Yellow acreage is the High Savannah Prospect controlled by A.R. Evans and Associates and Impact Energy ~ 13,000 Acres.

• Light red is Acreage recently purchased by Southwestern Production Company $600-$900/ Ac.

• Samson Oil and Gas reportedly has completed a Threeforks Producer (NW of Brockton Fault Line of death) ~ 1200 BOPD.

• Southwestern Production Company drilling 3 townships west.

• We have leased interest in about 15+ DSUs. Play is just now being exploited in this portion of the basin. Expected reserves of 700-1,000 MBO per DSU is possible!

• Clearly industry is moving west across the fault!


Data Resources – Take Away!


Excellent website provided by USGS to search Geologic Formation Names, ages, type locations and reference Stratigraphy.

Data Resources (Cont’d)

• Roadside Geology Series for individual States– Available at Barnes and Noble bookstores.

• Web based information – search – State Geological Surveys – State Oil and Gas Commissions – USGS – Rocky Mountain Association of Geologists – American Association of Geologists

• You may also call me at my office.


Summary • The Rocky Mountain Region contains major new field reserve potential

in multiple wide spread shale reservoirs that are thermally mature, oil and gas generating. We have only touched on a couple. These vast unconventional traps will be developed in the future utilizing game changing technology 3D seismic, horizontal drilling, and multi stage completion.

• Time and rock Stratigraphy is important for DALTA members to understand interest breakdown and formation segregation for the many new horizontal DSUs and reservoirs that are being developed all over the Rocky Mountain Region.

• We will continue to learn, adapt, and develop new technology to find and produce oil and gas pushing further down the Resource Pyramid.

• The Future is bright and in your hands! • For all the Jed Clampetts out there – THANK

YOU!


The future is bright and in your hands!



David J Steyaert, Petroleum Geologist impact Energy Resources, LLC

621 17th Street, Suite 1630 Denver, Colorado 80293

Phone: 303-592-1030 Email: [email protected]

dalta presentation david j. steyaert, impact energy … · 2012. 7. 30. · our general...

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