Re-working of the first five wells in the first phase was completed in mid-August 2007 with a production of 100 barrels per day. The completion of first lateral drilling on Federal 12-13 will lift total output of Grassy Trails to 300 barrels per day.
Genesis Energy Executive Director Mr Terence Kong said: "The top of the A Zone reservoir was logged by Schlumberger in the Fed 12-13 pilot hole on March 17, 1983, and recent completion of the lateral and sample taken would enable us to have a thorough understanding of the composition of the Zone."
"Layers of more sandstone-rich, less radioactive rock occur in the A Zone between 3461’ and 3464’ and between 3471’ and 3476’. These target layers are bounded above and below by hard, non-porous siltstone or shale layers. It is possible that the shallower of these two zones may contain as much non-porous chert as sandstone. In conjunction with the fractures that traverse both the porous and non-porous zones, the deeper zone forms the oil reservoir." Mr. David Allin, Consulting Petroleum Geologist of Genesis Energy added. "During the non-circulating periods, oil was able to enter the wellbore and was swept out when circulation was regained. Indications are that a viable oil reservoir has been intersected that should augment the existing 25,000 barrels of oil recovery now attributed to the Federal 12-13."
Mr. Kong said "While one lateral equals to approximately 8 new verticals wells, we expect the oil recovery for Fed 12-13 could be augmented to over 250,000 barrels. With Brent crude oil price hitting record highs, the additional production from Grassy Trails will contribute to further revenue growth and improvements in performance.
There was a delay in the first horizontal kick out due to stringent Government approval and snow storms in Salt Lake City. However, with our dedicated geologists, operator and drilling crews, we were able to overcome the glacial weather with fruitful results. Currently, our team is working on a second lateral drilling and we expect the daily production of oil to be further raised.
On the other hand, we will continue to pursue the development of an oil production platform in Shaanxi, China, to complement our US operation, with a view to enhancing our business portfolio. The drilling rig is scheduled to commence immediately after the Chinese New Year holiday. Our new office and technical team have already been set up in Xian. We will take forward our business plans to aim for new opportunities which have strong project fundamentals and are compatible with our experience and resources."
Grassy Trails encompasses an area of 6,268 acres and has yielded approximately 600,000 barrels of golden-colored, light, sweet crude oil since its discovery in 1962. To date a total of 31 wells have been drilled at Grassy Trails to delineate the oil reservoir. The estimated total reserve of crude oil is about 1.0 million barrels, of which about 157,000 barrels are proved undeveloped and about 783,000 barrels are probable reserves.
About Genesis Energy Issued by : Through :
Genesis Energy Holdings Limited (702) is an energy company with focus on oil and gas exploitation and operations. The company invests in and operates oil and gas fields in the United States and is currently in negotiations with regard to certain investments in oil and gas projects in the PRC. Downstream, the company is engaged in gas stations and pipelined gas businesses.
Genesis Energy Holdings Limited
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