West Canyon Energy signs LOI for Spring Creek Prospect in North Dakota
  by: OilOnline
  Wednesday, April 16, 2008

West Canyon Energy Corp. has signed a Letter of Intent to acquire one-hundred percent (100%) working interest, in the Spring Creek Prospect.

On March 25, 2008 we entered into a letter of intent (“LOI”) with Slope County Oil Company to acquire their existing leases in the Spring Creek Red River Prospect for the payment of $240,000 and $7,500 in geologist fees. The Company will acquire 4,800 acres of property in North Dakota with estimated potential reserves of 60 million barrels of oil (MMBO).

Prospect Description

Spring Creek is located in the Williston Basin in Township 136 North, Ranges 104 and 103 West of Slope County, North Dakota, on the two unnamed structures mapped with geomorphological imaging to the Northeast of the Cedar Creek Anticline. These structures are thought to be penecontemporaneous with the Cedar Creek Anticline and are likely folding features associated with its formation. The area has a proven track record of Red River formation oil and gas production. The Prospect under consideration is bracketed to the northeast by successful wells drilled by Hunt Oil Company and to the southwest by the production of the Cedar Creek Anticline.

The primary target formation of this Prospect is the Ordovician Red River at depth of about 11,400’. The secondary target formations are the Devonian Birdbear (Nisku) at a depth of about 9800’ and the Mississippian Lodgepole at a depth of about 9450’. There are tertiary shallow gas target formations that may be assessed in the Cretaceous, being the Eagle Sandstones and Niobrara. All of these target formations can be evaluated from a single test well placed over one of the twelve Lodgepole Reefs mapped on the Prospect.

The Bakken Play Region

The Bakken Play is a geological trend approximately 2 miles beneath the surface which has shown potential for extremely prolific hydrocarbon production. Because of its depth, recent technological progress with drilling, and reserve analysis technology, it has recently attracted attention from major North American players. According to this article from NextEnergyNews.com: “It was not until 2007, when EOG Resources of Texas started a frenzy when they drilled a single well in Parshal N.D. that is expected to yield 700,000 barrels of oil, that real excitement and money started to flow in North Dakota.” The same report indicated that some estimates have reserve potential as high as 200 billion barrels of oil.

Industry Presence in North Dakota

The Red River Formation in southwestern North Dakota has been worked extensively over the past decades by a number of exploration companies including: Burlington Resources Inc., Continental Resources Inc., Encore Operating LP and Hunt Oil Company. Major industry players such as Marathon Oil, have invested in over 200,000 acres of property at a cost of 1.5 billion dollars with plans of spudding over 300 exploratory wells in the next 5 years. They, along with other major industry players, have also entered into the North Dakota exploration scene with hopes of making discoveries and improving infrastructure. According to 3P10 official government report, as late as December 2006, possible recoverable reserves top the 1.6 billion barrel mark throughout the state.

North Dakota

North Dakota has been the subject of many different independent and government resource analyses with estimates of reserve potential being in the neighborhood of 660 million barrels, as stated by the North Dakota Department of Mineral Resources (DMR). The report also states that the average production in the state is approx 109,000 barrels of oil per day in 2006, and nearly 40 MMBO per year. By the end of 2006, there were more than 4,100 wells capable of producing in the state. As well in that year, over 62 billion cubic feet of natural gas was produced in the state. According to the same report, all time crude oil production in North Dakota is in excess of 1.5 Billion barrels.

Fred B Zaziski, Chairman of West Canyon Energy, states: “North Dakota has recently become a prolific 'hot-spot' for oil and gas. It was an easy decision to seek out projects in the area, and I am excited at the potential this brings to our company.”

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