Sabine/Warnica Phase 3 Multi Well Fund

/Sabine/Warnica Phase 3 Multi Well Fund
Sabine/Warnica Phase 3 Multi Well Fund 2018-06-22T17:50:32+00:00

Project Description

Summary:

This is a three well project (each well will hold 40 acres) that is taking place on two different, proven production mineral leases. One of the three wells will be located in Roosevelt County, New Mexico. The planned vertical depth of this well is approximately 8,100’. The other two wells will be in Sabine Parish, Louisiana. The planned vertical depth of these wells is approximately 4,700’ and are look alikes to the first six wells our team has drilled successfully. In addition to having two different locations for the three wells, we have recent seismic data. This seismic technology has been instrumental in our teams ability to successfully locate target pay zones.

The 3D and 2D patented technology has identified 11 pay zones. The primary zones for the New Mexico well are the Pennsylvanian and Mississippian and the secondary zone is a Wolfcamp channel. The primary zones for the two Louisiana wells are the Glen Rose and Saratoga and the secondary zones are the Fredericksburg and Paluxy.

To date, our Leaseholder, Operating Partner, and ASE has invested $11 million in this project. They have completed all additional geology and begun operations, drilling, and logging.

Status: We have successfully drilled the first of the “Sabine” wells. That well is currently under completion.

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Lease Information:

Louisiana

The “Sabine” project is a Saratoga Chalk development in Sabine Parish, Louisiana. This 12,400 acre project is in one of the most prolific, historical shallow fields in the State of Louisiana. Less than 4,000 feet away from our position, production yields more than 1.5 million barrels of oil, and over 64 billion cubic feet of natural gas, just within our reservoir formations.

A detailed geological analysis reveals large remaining oil and gas reserves in both the Saratoga formation (2,500 feet) and the Fredericksburg formation (3,500 feet), also with deeper untapped opportunities in the Austin Chalk, Tuscaloosa, Petite, Paluxy, James Lime, Glen Rose and Haynesville. Over the past decade, majors such as Chesapeake, Shell, Comstock, and Vine have completed major Haynesville developments upon hundreds of thousands of net acres, all surrounding our acreage.

In 2013 large companies were paying $3,000, per acre for large tracts in the Haynesville development. Shell expressed an interest in purchasing this lease position, which had not been drilled in 25 years due to a continuous family litigation. Our partners were able to settle the family differences, paying over $6 million, to obtain one lease that includes the entire 12,400 acres with all depths. The initial intention was to flip the lease to Shell for profit, however after the lease was acquired in 2014, the natural gas prices dropped. Shell had suspended their Haynesville drilling program and eventually sold their position to Vine Petroleum. As a result, our partners started to evaluate the shallow zones with their in-house 2-D lines and discovered a lot of historical production. An opportunity presented itself to develop low cost, conventional reserves, with substantial upside and revenue stream to support continuous development. 

The next layer of the geology consisted of purchasing the complete set 3D/5D Seismic Surveys over the entire 12,000 acres position from Veritas. The quality controlled data works remarkably well with our state-of-the art visualization software which is proprietary to our partners. It gives a very clear picture of how production occurs in the Saratoga, Fredericksburg and Glen Rose formations.

The Phase 2 well was successfully drilled on this leases and is currently going into production. The first of the Phase 3 Wells was also drilled on this lease and is currently under completion.

New Mexico

The “Warnica” Project is a multi-zone development in Roosevelt County, New Mexico that is located on the northwest rim of the Permian Basin. This position covers approximately 5,000 leased acres. The geo trend, known as the string of pearls, goes through our lease, and contains six major producing oil and gas fields. One of which is the highly productive Peterson
field that lies two miles south of our lease.

The “Warnica” project offsets the Peterson Field, which has produced over 5.5 million barrels of oil, and offsets additional fields that have produced over 30 million barrels of oil and over 125 billion cubic feet of gas throughout five separate reservoirs.

Over (40) years ago local geologists initiated the “Warnica” project after reviewing 2D seismic lines shot in the 1970’s. Operators continued to move north toward the basin edge looking for hydrocarbon traps over the next decade. In the early 1980’s, the latest finds were from the Peterson Field (4.4 MMBO) and North Peterson Field (500 MBO). Our partners revived the project by reinitializing the leasing effort and shooting 3D seismic surveys over the entire acreage position (40 sq miles). The seismic data indicates a minimum of nine structural highs in several different formations. The primary targets are the Pennsylvanian, Fusselman, Mississippian and Permian Wolfcamp and secondary targets are the Granite Wash, San Andreas and Abo. This prospect has huge upside reserve potential.

The 3rd well location of our Phase 3 Project is on this lease.

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