Crudecorp AS has purchased 90 % working interest and sole operatorship of a 640 acre lease-block comprised of the adjacent Mitchel and Bacon leases in the Chico Martinez Field (the “property”). Together, such leases account for the entirety of Section 35 of Township 28S, Range 20E and represent the majority of the Chico Martinez Field.
This 640 acre property possesses an estimated 20-40 MMBbl (million barrels) of recoverable oil in the Etchegoin formation, dependent on production method and oil price. The Etchegoin reservoir is found at 400 - 1500 feet. The oil produced is a 12.8 to 15.0 gravity crude. There are by January 2013 approximately 55 producing wells in the field.
Earlier estimates made by external engineering firms of the STOOIP in the Chico Martinez property has ranged from 55 to 63.6 MM Bbl of oil. Crudecorp's own and most recent estimates has been a total of 50,5 MMBbl of oil in place.
In January 2012, the company received an independent estimate from Gaffney, Cline & Associates (GCA) of the STOOIP for the part of Chico Martinez which is covered by Section 35 (owned by Crudecorp). GCA estimated the STOOIP to range from 27 MMBbl of oil for the P90 area (High confidence), 50.5 MMBbl for the P50 area (Best estimate), and 65.4 MMBbl for the P10 area (Low confidence).
The GCA estimates corresponds well with Crudecorp's own estimates.
BACKGROUND TO THE AREA
The Chico Martinez Field is located in an active tectonic setting between the cities of Los Angeles and San Francisco in the prolifically productive San Joaquin Basin, which is situated in the southern portion of the Central Valley of California. Its immediate neighbors (located two miles away to the Northeast and Southeast, respectively) are the well-known South Belridge Field (discovered in 1911 with current oil accumulations of approximately two billion barrels) and Cymric Field (discovered in 1909 with current oil accumulations of approximately three hundred-fifty million barrels), two of the most productive oil fields in the United states. The Belridge Oil Company - on the basis of the Belridge field - grew into one of the ten largest U.S. oil companies and was purchased by Shell Oil Company in 1979 for the reported amount of $3.65 billion.
THE CHICO MARTINEZ FIELD
Production was established in the field in 1927 with the Max L. Pray #1 well, which produced heavy-grade crude oil (12.8 API gravity) at a rate of 11 BOPD from a 21 foot thick section found at a depth between 830 - 851 feet. At the time, heavy oil was much less desirable than it is now, and subsequent drilling in the field was sporadic into the late 1960s.
There are 62 wells on the property which are reported to have produced a cumulative total of approximately 550,000 barrels of oil, most of which has been produced from the Etchegoin formation (Pliocene age). The Mitchel-Bacon Etchegoin sands, which occur at depths ranging from 400 to 1,500 feet, are deltaic deposited sands which vary in quality and character, and which produce a low gravity, viscous crude. Although development activities were initiated on the property in 1966, attempts to implement an enhanced production program weren’t undertaken until October 1981, during which time an inadequate cyclic steam injection effort was made. Such undertaking, even though anemic in size and effort, resulted in a ten-fold increase in production and confirmed that the Etchegoin reservoir possesses the petro-physical characteristics necessary to respond to and support a successful thermal enhanced recovery operation. The cyclic steaming of the reservoir was discontinued within a few years, due to a dramatic and protracted decline in oil prices; an effort to implement a full steam flood was never made. The property has remained almost completely inactive since the middle 1980s. Several excellent quality reserve reports and analyses have been conducted in regards to the property, but development activities predicated on the conclusions made by these reports have yet to be fully implemented.
Crudecorp intends to develop Chico Martinez through a planned steam injection programme. Several fields in the same trend in California are successfully producing from the same geologic horizons with steam injection as the primary drive (currently around 150,000 bopd).