Cottonwood Wash Prospect

Cottonwood Wash Prospect

Grand County , Utah

Proposal

Cottonwood Wash Prospect, offered by Celtic Resources, LLC [CRL], is located on the southeast flank of the Uinta Basin in T18-19S and R18E, Grand County, Utah. The prospect is located 15+ mi northwest of I-70 and 25 mi west of the Utah-Colorado border [Fig.1].

map showing location of utah and area of prospect
Fig. 1: Prospect Location. Utah Highway Map

CRL proposes to renew development of the Book Cliffs Field a 2-well Dakota gas field at ~5,500’. At least 4 locations have been identified that will target multiple gas sand reservoirs in the Dakota and Cedar Mountain Formations. Drilling 1 or more of these locations may result in identifying additional locations. Recoverable gas per well potentially can range to over 2.0+ BCFE based on multiple sand reservoirs successfully completed in a single wellbore. Existing roads and pipeline right-of-way exists to service the field. Terms will be provided in a separate deal sheet. Additional potential exists in oil in the Niobrara Equivalent and gas in the Lower Mancos, Juana Lopez, Morrison, and Entrada.

Geology

The Cottonwood Wash Prospect is located in the transition from the Uncompahgre Uplift northwest into the southeast Uinta Basin. A series of alternating northwest, plunging anticlines and synclines exist in this region wherein oil and gas production is located along the crest of these anticlines [Fig.2]. Production is mainly Dakota and Cedar Mountain gas from point-bar sands and braided-stream sands, respectively that were deposited in rivers flowing from southwest to northeast [Fig.2].

Dakota Cedar Mountain River Trends Map
Fig. 2: Dakota & Cedar Mountain River Trends

Thus, traps are formed where these sandstone reservoirs intersect the anticlinal axes at nearly right angles. The prospect is located on the Cottonwood Creek Anticline. This anticline is midway between the Cisco Dome and Westwater Anticlines [2 prolifically producing anticlines] that lie southwest and northeast respectively.

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The Cottonwood Creek Anticline is a continuation of the Cisco Springs Anticline [also prolifically productive] but has a more westerly trend versus the NW trend of the Cisco Springs Anticline. This change in trend likely resulted in a sharper anticlinal fold in the prospect area [Fig. 3].

Dakota Silt Structure Prospect Area Map
Fig. 3: Dakota Silt Structure Prospect Area

Lower Cretaceous aged Dakota and Cedar Mountain contain the principal reservoirs in the region. The Dakota is subdivided into the 1st through 3rd benches, top to bottom, with river size and sand thickness decreasing in size upward [Fig. 4]. These benches were deposited by

stratigraphic cross section profile dakota silt
Fig. 4: Strat. N-S Cross-Section, datum base Dakota Silt.
Index on Fig. 3


by meandering rivers that are point bar sand reservoirs separated by generally impermeable, abandoned channel clay fill. These reservoirs are limited in size and quality due to bar size and clay drapes and porosity infill. Diagenesis, the process of postdepositional clay, lime, and quartz mineral growths in pores, also restricts reservoir quality and size and can be highly variable from sand bar to bar. Cedar Mountain reservoirs are deposited in braided streams where rivers that wash back and forth over each other resulting in thicker sands, coarser sand grains, and much less system clay and fewer abandoned channel fills. Thus, Cedar Mountain braided stream reservoirs are larger in area size, thicker and better quality than point bar reservoirs. In this region larger per well recoveries result from anticline-crest wells that have gas filled Cedar Mountain reservoir in combination with or without one or more gas filled Dakota bench reservoirs [Figs. 5,6].

Cedar Mountain Trends Map with Producers
Fig. 5: Cedar Mountain Trends with Producers
Highlighted

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stratigraphic cross section dakota sil
Fig. 6: Strat. Cross-Section W-E, datum Dakota Silt base, showing Cedar Mountain Producers

Book Cliffs Field History

The Book Cliffs is composed of 2 gas wells that are located in Secs 32, and 33, T18S-R22E [Fig. 3]. The Book Cliffs Unit was formed over the prospect area in early 1961 by Gulf Oil Corp. and the Book Cliffs #1 [BC-1] well was completed later in 1961. The BC-1 is located in SESE Sec. 32-T18S-R22E and was TD’d in the Morrison Formation at 5,700 ft. Completed in 19 ft of perfs in the interval 5186-5246’ in the Dakota 2nd and 3rd benches [Fig. 4], the well IP’d 4,540 MCFGPD. Cumulative production until cessation of production in February 1996 was 204,629 MCFG [no water or oil reported]. The BC-2 well was drilled updip and found sand in the 1st and 3rd benches but virtually no gas and was plugged. The well apparently the 3rd bench sand in a separate river system. In 1962 the BC-3 was drilled and was completed 5306-5330’ in the 3rd Dakota Bench [Fig. 4]. The well IP’d for 2,500 MCFG and had cumulative production of 233,789 MCFG [again no water or oil reported] until cessation of production in 1997. Additionally, the #’s 4 and 5 were drilled that found no sand in none of the Dakota benches or the Cedar Mountain. Only the BC-1 well found sand in the Cedar Mountain. Of the 72’ of sand found in the Cedar Mountain in an anomalously thick interval 7’ was Buckhorn.


Field production began when the wells were finally hooked up to Northwest Pipeline’s Grand Valley gas gathering system in 1972. The producing wells have sat idle since 1997 because of encountering water production and the poor gas-price, well remediation economics.

There are no mudlogs or detailed well files known to exist such that evaluation can’t be made of additional zones besides the Dakota and Cedar Mountain. All of these wells appear to have been drilled on the anticline flanks with none drilled on the crest. There are no Entrada penetrations in the prospect area. A geologic report with mudlog from the Tenneco oil Co. #15-15 Diamond Canyon, located 3 mi NE in SE Sec. 15, T18SR22E [Fig. 3], describes that in the Lower Mancos background gas to 200 units and connection gasses to 900 units [8.9 #/gal MW]. That same report describes in the Juana Lopez background gas to 550 units with an increase in heavies and connection gasses to “peg out” at 1000 units [8.9 #/gal MW]. A group of wells 10-15 mi easterly in T18S-R24E have produced commercial oil from the Niobrara Equivalent. Southeasterly along the Cottonwood Creek Anticline the Entrada was production tested in the Tenneco Oil Co. #11-1 Long Canyon well located in NE Sec. 11, T19S-R22E. The Entrada was perf’d, frac’d, swab’d, and flowed 2.5 hr then died and was plugged. A “gas show” was noted in the Entrada [incorrectly identified as Morrison] in the UDOGM digital drilling records.

Well Recommendations

The recommended initial prospect well [Location A] to be drilled is located in NESW Sec. 33, T18S-R22E [Fig. 7] at footage calls 1575’ FSL and 1375’ FWL. Proposed TD is 5400’ in the Morrison Formation. Location A is expected to encounter the Cottonwood Creek Anticline in a crestal position and gas filled sands of 15’ of Cedar Mountain, 30’ of 3rd Dakota, 20’ of 2nd Dakota, and 20’ of 1st Dakota for a total 85’. For these cited “gas filled sands” and following please refer to figures 8-11. Location A is expected to recover 2.5+ BCFG from these stacked gas pays. The 2nd well [Location B] recommended to be drilled is located in CN2N2SE Sec. 32, T18S-R22E at footage calls 2400’ FSL and 1320’ FEL. Proposed TD is 5450’ in the Morrison Formation. Location B is expected to encounter the Cottonwood Creek Anticline in a crestal position and gas filled sands of 20’ of Cedar Mountain, 15’ of 3rd Dakota, 20’ of 2nd Dakota, and 0’ of 1st Dakota for a total 55’. Location B is expected to recover 1.5+ BCFG from these stacked gas pays.

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The 3rd well [Location C] recommended to be drilled is located in SWSE Sec. 30, T18S-R22E at footage calls 840’ FSL and 2215’ FEL. Proposed TD is 5500’ in the Morrison Formation. Location C is expected to encounter the Cottonwood Creek Anticline in a crestal position and gas filled sands of 0’ of Cedar Mountain, 25’ of 3rd Dakota, 20’ of 2nd Dakota, and 20’ of 1st Dakota for a total 65’. Location C is expected to recover 1.5+ BCFG from these stacked gas pays. Gas sands for Location C are projected from river channel systems found in the 2 wells located in the SE Sec. 15, T18S-R22Ewhere the Dakota 1st and 2nd benches were completed for production in the younger of the 2 wells for a reported IP of 766 MCFGPD but the well was not hooked up to pipeline and never produced. Location 4 located in the SENW Sec. 32, T18S-R22E and additional locations depend on the successful results from drilling the initial 3 recommended locations.

Book Cliffs Field Map with Proposed Prospect Locations
Fig. 7: Book Cliffs Field with Proposed Locations
map showing Isopach Dakota 1st Bench Gross with Dakota Silt Structure
Fig. 8: Isopach Dakota 1st Bench Gross with Dakota Silt Structure


Map showing Isopach Dakota 1st Bench Gross Sand with Dakota Silt Structure Fig. 9: Isopach Dakota 2nd Bench Gross Sand with Dakota Silt Structure
Fig. 9: Isopach Dakota 2nd Bench Gross Sand with Dakota Silt Structure
Map showing Isopach Dakota 3rd Bench Gross Sand with Dakota Silt Structure
Fig. 10: Isopach Dakota 3rd Bench Gross Sand with Dakota Silt Structure
Map showing Isopach Cedar Mountain Gross Sand with Dakota Silt Structure
Fig. 11: Isopach Cedar Mountain Gross Sand with Dakota Silt Structure

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Engineering

Material Balance studies combined with EUR’s have shown that both the BC-1 and BC-3 wells drained about 40 ac area each. This limited reservoir area can be controlled by sand bar size, fault compartmentalization, diagenesis extent, bottom water, and combinations of these. New wells with increased structural position can find larger bar size, especially in the Cedar Mountain and Dakota 3rd Bench, and more stacked gas-sands in a wellbore to achieve far greater drainage areas. A gas analysis from the UDOGM digital well file for the BC-1 shows a BTU of 1080 with little liquids. The BC-1 appears to have been completed naturally while the BC-3 was acidized and frac’d with 65 Mgal of 750 SCF/Bbl CO2 and 75 M#’s of sand. Casing for the wells uses 13-3/8” at 100-200’, 8-5/8” at 1700-1800’ to control Castlegate water, and production casing of 4-1/2 or 5-1/2”.

Land and Deal Terms

The lease schedule is itemized below and illustrated in Fig. 7.

Lease Schedule

Township 18 South, Range 22 East, SLM
Grand County, Utah

  • Section 28: S½S½
  • Section 29: W½
  • Section 30: All
  • Section 31: All
  • Section 32: All
  • Section 33: All

Township 19 South, Range 22 East, SLM
Grand County, Utah

  • Section 4: NW¼
  • Section 5: All
  • Section 6: All

Containing 4,551.00 Gross/Net acres more or less


Deal terms will be provided by the seller to accredited investors and buyers.

Economics

Completed gas well gross economics are generally along the guidelines of assumed AFE for a vertical gas well is $2 MM, an assumed average wellhead gas price of $3.00+/MMbtu, and an assumed EUR of 2.5 BCFG. Gross revenue is 7.5 MM$ for a better than 3 to 1 payout.

Marketing/Outlet

The Book Cliffs field was hooked up to the Northwest Pipeline’s Grand Valley gas gathering system in 1972 and both wells were put in producing status. The gas pipeline is 4” in size and known as “Trunk ‘B’ of the Grand Gas System” [Fig. 12].

OIL AND GAS FIELDS MAP OF UTAH, UGS pub. M-203
Fig. 12: “OIL AND GAS FIELDS MAP OF UTAH”, UGS pub. M-203

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