West Ranch Oil Field
Eternal Energy Corp. has acquired an additional 25% working interest in the SW extension of the main body of the West Ranch Field in Jackson County, Texas. The EERG acreage is believed to have reservoirs similar to those in the main body of the West Ranch Field, which is a well-known, long-standing producing field. EERG now owns 75% of this West Ranch extension.
In early 2006, Ryder-Scott Co., a Houston-based petroleum engineering consulting firm, analyzed the potential for waterflooding of the Glasscock reservoir underlying the EERG acreage. Based upon their review, Ryder-Scott attributes 900,000 barrels of proven undeveloped reserves in the Glasscock reservoir, 675,000 barrels net to EERG’s 75% interest.
Eternal Energy Corp. and its West Ranch operator, PNP Petroleum of San Antonio, a privately owned oil and gas company, have begun the initial well work to implement a pilot waterflood program of the Glasscock reservoir. The initial well work commenced in early December 2007 and, by the end of January 2008, two injectors at/near the original oil/water contact and two producers updip of the these injectors are expected to become operational. However, field work performed to date has identified the need to fracture-stimulate several water injection wells. We are currently evaluating various fracture designs. In the meantime, we continue with construction of the surface facilities required for the waterflood and expect to begin water injection by the end of the second quarter 2008.
If this pilot project is successful, EERG plans to implement a full-scale waterflood program of the Glasscock reservoir by the end of 2008. This could mean that up to 15 injectors and 15 producers would be working simultaneously on the property. According to a third party engineering study, performed by Bommer Engineering of San Antonio, Texas, the interest of EERG in this property has the potential, at current commodity prices, to generate up to approximately $650,000 to $750,000 per month of cash flow during the estimated 18-month peak production period of a successful waterflood project. EERG’s total oil production program for the Glasscock reservoir could span 10-years.