The directors and management of Edmonton, AB and Golden, Colo.-based Strata-X Ltd. (TSX VENTURE:SXE) are have provided the following update on the Vail Oil Project. The Vail Oil Project is a new high potential oil development project currently being leased by Strata-X.
The Vail Oil Project:
Strata-X is 'First Mover' on the Vail Oil Project
Strata-X completed an extensive in-house analysis of a highly productive onshore United States of America basin earlier this year. The results of this technical work led to the identification of a potential unconventional continuous oil field in a dolomitic reservoir, referred to as the Vail Oil Project located in the state of Illinois, USA, which is interpreted to extend over an area of approximately 500 square miles. The project is located on the western flank of the basin at depths between 3,500 to 5,000 feet.
In-house analysis of 120 historic wells that intersected the dolomitic reservoir and preponderance of wells with production, oil and gas recoveries from formation tests and reported oil shows in samples from the reservoir supports Strata-X's interpretation that the reservoir is oil saturated.
The dolomitic reservoir target of the Vail Oil Project is below the New Albany Shale which is interpreted to have expelled in excess of 300 billion barrels of oil (Lewan, et al., 2002). To date, the basin has produced over 4 billion barrels of oil (Higley, et al., 2001) primarily from structures above the source rock where several studies have geochemically linked the oil produced from these reservoirs to the New Albany Shale (Hatch, et al., 1990).
Strata-X recognizes direct analogies between the Elm Coulee Oil Field, located in the Williston Basin, and the Vail Oil Project. According to the Montana Board of Oil & Gas Conservation website, Elm Coulee has produced over 138 million barrels of oil equivalent to date from a continuous, unconventional oil field from the Bakken dolomitic reservoir and is expected to ultimately produce over 200 million barrels of oil (Sonnenberg and Pramudito, 2009). The dolomitic reservoirs in both Vail and Elm Coulee are of the same geological age, have similar thickness and are immediately below highly generative source rocks.
Elm Coulee has about 5 million barrels of oil in place (OOIP) per section (Walker, et al., 2006) which compares favorably to Vail's interpreted 3 million barrels of oil in place per section at shallower depths. Strata-X interprets the target 50,000 net acres at the Vail Oil Project contains over 230 million (undiscovered) barrels original oil in place (i) (see Cautionary Statement below).
Oil was intersected in many historic wells at Elm Coulee but, like Vail, oil flows and recoveries were sub-commercial in the early vertical wells. More recent horizontal fracturing treatments at Elm Coulee have resulted in commercial oil flows with July 2012 production from the field is in excess of 33,000 barrels of oil equivalent per day (Montana Board of Oil & Gas Conservation website, accessed 9/19/12). Strata-X commenced acquiring 100% net working interests in oil and gas exploration rights in two counties in the basin in early 2012. To date, the Company has acquired approximately 41,000 gross and 38,900 net acres for the Vail Oil Project at attractive terms. The Company's net revenue interest in the leases is approximately 86.25% with the primary terms of the leases, including options to extend, not expiring until the middle of calendar year 2017. The average total acquisition cost so far has been $68.69 per net acre which includes all acquisition costs including labor.
Strata-X is the first mover on the Vail Oil Project. In order for the Company to continue the low cost entry advantages of being first mover, it does not plan to reveal exact location of the Vail Oil Project until after the Company reaches its target of at least 50,000 acres. Strata-X hopes to reach this target later this year.
Strata-X is a Edmonton, Alberta and Golden, Colorado based company and is engaged in the business of oil and gas exploration and development with a variety of exploration opportunities in North Dakota, California, Colorado and Western Australia and production and development opportunities in California and Texas.
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