?There’s a discovery in the rugged country of Utah’s Hingeline, a belt of thrusted, twisted rocks that slashes through the center of the Beehive State. The find is Providence, and it’s been made by Wolverine Gas & Oil Corp., a privately held independent based in Grand Rapids, Michigan.


Wolverine and its partner, Occidental Petroleum Corp., haven’t issued any press releases about the new field, but word got out in February at the NAPE show in Houston. Now it’s widely discussed and generally acknowledged.


The size and shape of Providence are still unknown, but its significance is tremendous. Utah’s Hingeline is a section of the great Western thrust belt that stretches from Canada to Mexico, and creases Utah’s countryside from its southwestern counties to northeast of Salt Lake City.


Explorers have long known Utah harbors attractive structures in its thrust belt, but the book on the area was that it lacked source, a fundamental component of any petroleum system.

Utah's Hingeline play cuts diagonally across the center of the state, to the west of the enigmatic Paradox Basin. Both cryptic areas have yielded recent successes.

Wolverine first stirred up the state with its discovery of Covenant Field in 2004. It’s a jewel: IHS Inc. reports that, through September 2007, 10 Wolver­ine-operated wells in Cove­nant Field have had combined production of 4.5 million barrels of oil—and a million barrels of water—from more than 400 feet of net pay in repeated sections of Jurassic Navajo. Ultimate reserves have been estimated across an ample range, but many in the industry believe Covenant will recover around 100 million barrels. (For more on Covenant Field, see “Rock of Ages,” Oil and Gas Investor, April 2005.)


The Sevier County find ignited a flurry of exploration all along the complex and unyielding trend. It demonstrated that oil from distant Paleozoic source rocks was able to migrate into the Hingeline and become trapped there.


Since that time, dry holes have piled on each other—until now. The game has changed with the reputed success of Wolverine’s #24-1 Wolverine Federal Arapien Valley, in Section 24-20s-1e, Sanpete County. The discovery well for Providence Field is said to be productive from Navajo. That’s the reservoir at Covenant, which lies nearly 20 miles southwest.

Thrust-belt promise
“Overthrust plays, wherever they are in the world, have a string-of-pearls appearance,” says John Wallace, president and chief operating officer of Denver-based Delta Petroleum Corp., one of the prominent operators in the play. “Where oil migrated at the right time, structures along a leading-edge thrust fault can be full of oil.” The Canadian Overthrust belt has 50 fields that contain 10 billion barrels, and the Wyoming Overthrust has 20 fields that hold 2 billion barrels.


“We think the central Utah Hingeline is analogous to the Canadian thrust play, and that we’re beginning to see evidence that there’s potential for multiple fields.” The age and location of source rocks and timing of migration and trapping appear similar between Canada’s and Utah’s slices of the thrust belt. “That’s why Utah is just opening up—earlier models all looked to Wyoming, which is quite different.”


Delta holds 123,500 acres in Utah’s Hingeline with partners Denver-based Armstrong Oil & Gas and Whiting Petroleum Corp. The companies have prospects on 18 separate structures, stretching south from Covenant Field.
“This is a new province. We’re talking about finding and development costs in the range of a couple dollars per barrel. These are conventional fields and they are as economic as any feature in the U.S.”


To date, Delta has drilled two wells. The Joseph prospect, in Section 24-25s-4w, Sevier County, was 19 miles southwest of Covenant. Unexpectedly, it encountered a volcanic section above the Navajo that was full of inert gases.


Its second test, #23-44 Parowan Federal, in Section 23-33s-10w, Iron County, was drilled some 84 miles southwest of Covenant Field. It confirmed the presence of a large structure and saw oil in Jurassic Twin Creek, a reservoir that’s productive in Wyoming Overthrust fields. “Parowan was wet in the Navajo, but we’re very excited about the uphole potential in Twin Creek.” Delta will test Parowan late this summer, after lease stipulations to protect nesting raptors conclude.


Next up, Delta will drill its Beaver prospect, in Beaver County. The well will be in 30s-7w, and targets Jurassic Navajo. It is slated to spud mid-summer; well costs are projected at $4- to $5 million.


“We believe that there are several more fields to be found in the central Utah Hingeline, and that’s been reinforced by the second discovery. With the drilling planned by us and others, we’ll soon know if this will be a major oil-producing province.”

More players
Dallas-based Chief Oil & Gas LLC also works the Utah play. “We have about 200,000 acres in central Utah’s overthrust belt,” says Tony Carvalho, senior vice president, geology.


The bulk of Chief’s position lies north of Wolverine’s Providence Field; its partners are private Salt Lake City-based firms Pioneer Oil & Gas and International Petroleum LLC. “We think this play could develop into a number of fields that line up along the Gunnison thrust. These onshore conventional structures could be Covenant Field equivalents or 100 million barrels of recoverable oil each. That’s equivalent to deepwater targets in the Gulf of Mexico.”


Shortly, the partners will participate in a 750-square-mile airborne gradiometry survey of the thrust belt. “Depending on what we see from that survey, we’ll shoot either 2-D or 3-D seismic.”


Another group working the trend is composed of Dallas-based Petro-Hunt LLC, Midland-based Clayton Williams Energy Inc. and Yates Petroleum Corp., of Artesia, New Mexico. This combination drilled one well already, #35A-3-1 Vonda Christensen in Sanpete County, which was not successful. The partners plan another this year on their position.


Recently, Ansbro Petroleum Co. LLC staked a 5,000-foot well in southern Utah County, some 75 miles north-northeast of Covenant Field. The Denver-based company plugged and abandoned a 13,308-foot test in mid-2006 about two miles from its current location, reports IHS Inc.


North American Exploration LLC, a private Denver-based independent, has a Parowan prospect of its own, about nine miles southwest of Delta’s Parowan. “We think Covenant, and now Providence and Delta’s Parowan, are part of a larger system of hydrocarbon generation, migration and trapping,” says Mark Grummon, executive vice president.


On its 60,000-acre project, North American is marketing a 10,000-foot exploratory well to test a closed, four-way structure updip from shows in two existing wells. It expects to encounter Navajo at 2,500 feet and Permian Kaibab at 10,000 feet. The latter objective is particularly interesting, as Wolverine has drilled a deep test in Covenant Field that is rumored to be productive in Kaibab.


Aeromagnetic data suggest the root of North American’s Parowan structure could be up to 12,000 acres in size. Three seismic lines cross the prospect and confirm closure on both the Kaibab and a deeper structure. Additionally, geologic history suggests that this area is favorably positioned to have trapped oil that migrated into the Hingeline from the west.


“We think potential reserves are between 50- and 200 million barrels of oil equivalent.”

Paradox salt and clastics
East of the Hingeline, in the northern Paradox Basin, another intriguing play is under way. It targets the Paradox formation, a complicated pile of more than 4,000 feet of section that consists of up to 29 cycles of marine and clastic sediments encased in salt. Each of these cycles consists of source-rock shales with some siltstone, sandstone and carbonates. Delta geologists call these clastic breaks.


The clastic breaks are often between 20 and 60 feet thick; the thickest and deepest unit is the Cane Creek, which can reach more than 100 feet. The Cane Creek is absolutely loaded with organics, and total organic carbon (TOC) of up to 28% has been measured.


In this unusual formation, hydrocarbons are generated from the organic-rich clastic zones as they are subjected to heat and pressure. The salt is a perfect seal, so oil, gas and water are trapped in the intervals at high pressures. Expansion of the fluids and gases fracture the clastic zones, providing excellent permeabilities.


Delta has been working the Paradox formation in a new way at its 36,400-net-acre Greentown project in central Grand County. In this area, the Paradox clastics contain significant amounts of sandstone and siltstone.
“This is an unconventional play,” says Wallace. “We have more than 1,000 feet of net pay in overpressured, heavily fractured, stacked intervals located on a large structural anticline.”


In early 2007, Delta’s #36-11 Greentown State discovery, in Section 36-21s-16e, blew out in the “O” zone at a depth of 8,500 feet. The well flowed at rates of 15 million cubic feet of gas a day before it was stabilized at 5 million and 125 barrels of condensate a day. The pressure gradient was 0.83 psi per foot.


Delta followed that up with the #32-42 Greentown State, some 6.5 miles away. That well encountered the same pressures and flowed at similar rates from the same interval. The operator completed the bottom eight intervals, and tested at a sustained rate of 2 million and 500 barrels of condensate per day. “As we move up the hole, the hydrocarbons get oilier; our testing suggests that our production will be 50% high-gravity oil and 50% 1,300-Btu gas.”


To date, Delta has developed Greentown with six vertical wells. But the company, an experienced horizontal driller, is switching to laterals. In the deep Austin Chalk play on the Texas Gulf Coast, it drills 6,000- to 7,000-foot laterals into the overpressured reservoir, encountered at 14,000 feet subsea. “We’re taking what we’ve learned in the Austin Chalk and applying it at Greentown.”


At present, the company has two rigs running full time at Greentown. It is drilling horizontal wells in Cane Creek (presently it’s on its third such test), and it also plans future horizontal wells in the O zone, found some 600 feet shallower. A horizontal is forecast to cost $5.5 million. From the O zone, Delta’s reserve target is 6 billion cubic feet equivalent (Bcfe) per 80-acre unit. “We don’t have estimates yet for the Cane Creek, but it will be multiple Bcfes.”


Delta is constructing a gas-processing plant with initial capacity of 25 million cubic feet per day, and building a 40-mile pipeline to tie Greentown into sales. First gas could flow mid-summer.


All told, given the considerable size of the feature and the thickness and extent of prospective zones, Greentown appears capable of containing multiple trillion cubic feet.


A key question is the importance of structural position. Delta generated the prospect in-house, and it concentrated its acreage on top of a salt anticline. “So far, we haven’t seen any difference in the ability of these clastics to be hydrocarbon-bearing depending on structure. We haven’t seen any gas-water or oil-water contacts. But, we think fracturing will be more intense on top of the anticline.” Other operators, including Petro-Canada, are drilling wells in various downdip structural positions.


Delta also has several lookalike prospects to Greentown in the deeps of the Paradox Basin. It recently drilled its Salt Valley prospect, but the combination of salt, geopressures and fractured reservoirs created some obvious drilling challenges. The casing collapsed from salt flow.


Delta redesigned its casing program and plans a redrill later this year or early next year.


“We think our Greentown model will hold up throughout the deepest part of the Paradox Basin. It will involve several different salt anticlines, and it could be very significant. Between the Paradox play and the Hingeline, it’s an exciting time in Utah,” says Wallace.