Oil fields in Utah could be worth $5 billion
Discovery is likely the state's largest in 25 years, geologist says
Nobody is certain how big the field might be, state experts reported to the Natural Resources, Agriculture and Environment Interim Committee. But two wells are producing — one started pumping in March 2004, the other in November — and together they extract 1,500 barrels of oil per day, worth $75,000.
"Neither well has shown a decrease in production or a decline at this point," said John Baza, director of the Utah Division of Oil, Gas and Mining. A decline is needed in order to calculate the overall size of an oil field. The wells are are beside U-24, between Sigurd, Sevier County, and Loa, Wayne County.
"It's hard to predict how long these wells will last," he said. "They're producing from a geologic area that is not known for producing in the past."
Baza passed committee members a bottle containing a sample of the oil, which he said was a very light crude having nearly "the characteristics of gasoline or kerosene . . . considered a very good quality crude oil."
The discoverer, Wolverine Oil & Gas Corp., has nine other wells at various stages of the approval or drilling process.
And that may be just the start.
Thomas Chidsey, senior geologist and petroleum section chief for the Utah Geological Survey, said there is a potential for new oil fields to be discovered because of this find. The field is likely the largest oil drilling discovery in Utah in 25 years, and possibly one of the biggest in the lower 48 states in that period, he said.
Operators have said this could be a 100-million-barrel field, he said. At the cost of $50 a barrel, that works out to $5 billion worth of oil.
The Pineview field east of Coalville, dating to about 1975, produced over 35 million barrels, he said. It helped indicate the location of new fields in Wyoming.
Chidsey cautioned that while experts believe all the right conditions are present in the Sevier County region, they may not be. Sometimes a discovery turns out to be a "one-field wonder . . . This could happen," he said.
Although at least 25 wells were drilled in the vicinity before the Wolverine strike, the state believes the discovery has "huge potential," he added. Now that the needed conditions are better understood, the chances of discovering new sources are much better.
The high price of crude has stimulated another round of interest in Utah's vast tar sands and oil shale deposits. David Tabet, the Survey's energy and minerals program manager, said some of the biggest deposits are in the Uintah Basin.
Deposits can be difficult to extract or refine and talk of developing them often generates environmental controversy.
"There are large enough lease blocks that exist on state and private lands to start development," Tabet said. But a large-scale project would require federal leases, he added.
Rep. John G. Mathis, R-Vernal, whose district is in the midst of some the greatest deposits of these unconventional fuels, cautioned against getting too excited about oil shale and tar sands. When a boom goes bust, he said, residents are left to pick up the pieces.
"For 25 years, this has been a dream," said Mathis, "and I think it's going to continue to be a dream for a while."
E-mail: bau@desnews.com
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