Abstract

What else can be done to an old field where past operators have tried just about everything including 3-D seismic? If there is anything else, would it add quantifiable value to the property?

As an acquirer of mature properties, this common challenge for Durango Resources Corp. (“Durango”) was dealt with by combining old-fashioned geological and engineering methods with new technology. Some of these methods included thorough data gathering and detailed analysis of the stratigraphy and depositional environment of all well logs.

Completing a detailed field study combined with new technology has resulted in new life for the old field and has added definable value to the property.

INTRODUCTION

When dealing with mature older fields, conventional acquisition and exploitation companies usually direct their attention towards skillful buying, field operation improvement, 3-D seismic application, new completion methods (horizontal or fracing) or simply hoping for increased price movement. Durango’s strategy is to use a methodology whereas detailed stratigraphy and environmental facies expertise is used and combined with new technology, identifying the amount and location of remaining oil and gas reserves. The Company believes this should be every operator’s ultimate objective and reward or Grail. Having this new data will not only assist in a development or depletion plan but can also have immediate value in documenting asset reserves.

One such field is the Richard King Field located onshore in Nueces County, South Texas. Discovered in 1928 by Sun Oil Company, over the years the field has been passed through from company to smaller company as each either monitored or made their attempts at increasing production and value. By the time Durango acquired the field, many of the above mentioned procedures had taken place including a new 3-D seismic application and yet, production had declined to a point of economic obsolescence. Durango embarked on the new strategy to increase value by applying a new look in its search for the Grail at the Richard King Field.

FIELD DESCRIPTION

Over the past 78 years, the Richard King Field has produced over 5MMBO and 250 BCFG from as many as 40 separated stratigraphic intervals. Complex lenticular sands overlay a gentle rollover anticline with a few small minor faults also present. As illustrated on the type log (See Figure 1), the section of study encompasses thousands of vertical feet of productive (oil, gas or both) intervals and sands. Over 400 wells drilled in a 7000+ acre block remained with several shut-in wells and few producers.