Red Top Program - Warning Prospect

Background:  The Warning project was included in the 1999 Red Top Program and 26 gas-sieve locations were sampled on August 11, 1999.  The area was surveyed prior to drilling any of the wells #1-4 or the washdown of a dry hole for a SWDW.  The area is greater than two miles from the nearest production.

Geology:  The project is located in the Mid-continent region on the eastern flanks of the Denver Basin. Production occurs in Pennsylvanian Age Lansing limestones at about 4000-4500 ft.  Production is controlled by structure yet, porosity development must also be present.  Often times a structural trend is followed successfully but porosity development is unpredictable and increases the exploration risk for these trends. Multiple zones, within the Lansing, can be productive and which zones are productive are thought to be controlled by subtle structural changes on the main structural feature.  This flank of the basin is underpressured for burial depth due to basin events and outcrops, with virgin bottom hole pressure of about 1100 psi.  A show hole later washed down for use as a salt-water disposal well, at gas-sieve location WP-21, was the data leading the operator to drilling Well #1.

Gas-Sieve Data Interpretation:  Total hydrocarbon data suggested that proposed location WP-5 exhibited twice the soil vapor hydrocarbons as the show hole and had a ratio number of 1.29.  Since this area of the basin is underpressured, all surface geochemical anomalies were expected to exhibit less magnitude of total hydrocarbons.  This occurrence is expected because it is pressure that drives reservoir hydrocarbons to the surface.  WP-5 was expected to be a producer and it was at over 200 BOPD.

After several months producing Well #1, the operator drilled Well #2 at geochemistry sampling point WP-6. This point had a total hydrocarbon value similar to that of the first well, however, it's ratio or composition at 2.04 was dissimilar to the first well.  Well #2 came in 11 feet low to Well #1 and was productive from a different Lansing zone.

WP-19 had a “totals" value of 119 ug/l.  This value was lower than that of Well #l or Well #2 but higher than the show hole and exhibited a ratio similar to Well #1.  Well #3 drilled to be structurally flat to Well #1, and it was a producer, although not as good as the first two wells.  It was productive from the zone encountered in Well #1 (similar ratios between #1 and #3).

Well #4, at sample location WP-16, was drilled in the spring of 2000.  As predicted, this location was productive in the Lansing zone that was encountered in Well #1 and Well #3.  This prediction was based on the ratio data that suggests that these locations have a similar composition of the soil gases. This location had a higher total hydrocarbon concentration in the soil gas, which made this look like a very optimistic location.  Indeed this location had not only a thick Lansing zone but the best porosity encountered in this new field.

Thus by comparing "total hydrocarbons" and ratio data derived from the gas-sieve survey, it is possible to rate the productive potential of the other points in the survey.  The geochemical anomaly at location WP-14 appears to be an excellent location for another productive Lansing well.  It is unlikely that this location will be drilled because it is on the lease line.

Update-November 2000:  To date, nine wells have been drilled on the survey area and the show hole at WP-21 has been washed down.  Nine of the ten wells are productive (including the wash down), all of the producers occur in the geochemistry anomaly.  One low dry hole was drilled one location east of WP-5.  The geochemistry data suggested the hole would be dry.  Total daily production at this new millennium field is about 1000 BOPD.  No waterflood has been initiated.