The Perth-based junior has developed a two-year recovery program based on modern technology and techniques to make the wells flow again at the historic 13 square kilometre Grieve oil field in the state’s Wind River Basin, first drilled in 1954.
The company announced this morning that a workover rig has arrived on site and started the first part of the multi-faceted program that has started ahead of schedule.
But Elk has plenty of work ahead before it achieves its goal of pumping 1000-plus barrels a day from the field by 2007.
Getting the oil out of the field, located 50 kilometres west of the City of Casper, will be undertaken in stages.
Current output will be increased to 100 and then 400 barrels a day by June of next year in the first and second parts of the strategy, for which A$2.3 million is budgeted. Then a year-long recovery program in 2006-7 could lead to passing the anticipated 1000 barrels a day output.
A rig is currently working over four wells to be used as initial producers in the first stage of the recovery program, Elk managing director Bob Cook said from Wyoming.
“They hire rigs as we in Australia would hire a plumber,” Cook said.
“They rely on a handshake. It's a fantastic environment to operate in; an oil province unlike anything that we have in Australia.”
What impressed Cook more was the independently estimated 12 million barrels of reserves that could still be recovered from Grieve.
The field’s production history also impressed the Elk team. At one time it was the largest producing field in the state and purportedly produced 40,000 barrels of oil per day.
“Some of the wells at the northern end of the field hadn’t produced since the 1970s. But they produced only oil, some at 300 barrels a day, which was amazing,” Cook said.
Grieve also offered 100% ownership at the surface facilities and at all depths below, giving Elk the potential to conduct uninterrupted operations – compared with fractured spread of ownerships on the land and sub-surface that is experienced by many oil companies operating in the US.
There is just one well left operating from the 30 wells that had contributed to the field’s lifetime production of 30 million barrels of oil and 76 billion cubic feet of gas.
The almost historic equipment – including three, imposing 10,000-barrel tanks – were almost a bonus for Elk's founders who had spent much of their oil careers working on difficult deep, offshore oil fields.
“We thought that using some of that offshore technology would provide the smarts to get that [Grieve] oil out,” Cook said.
The field was never worked with secondary techniques such as water flood or natural gas re-injection.
Elk’s effort will centre on the hydrocarbons in the Grieve Sandstone, a sequence within the Muddy Sandstone Formation. The oil is a premium light sweet crude.
