Gasco Energy Inc. said Thursday it plans to drill two conventional test wells for oil this fall in the Green River Formation, part of the company's plans to de-risk thousands of acres it holds in the Uinta Basin in eastern Utah.
The Denver-based company said it has received the federal permits required to drill the two test wells and plans to start constructing the drilling sites during the first full week of September. Gasco plans to drill the wells -- using a 1,000 hp rig secured for a two-well contract -- in succession to a vertical depth of about 5,500 feet. The company anticipates spudding the wells in October and for production to begin in November.
"Despite the permitting delays, we are pleased to commence operations on the two-well Green River program," Gasco CEO King Grant said. "We have selected high-graded locations which benefit from existing well logs from gas wells that were previously drilled by Gasco. By proving the productive potential of the Green River Formation, we believe we can begin to de-risk approximately 11,000 net acres, which we believe are prospective for crude oil in this part of the Uinta Basin."
Gasco is operator of both wells and has a 100% working interest. The company estimates that it will cost about $800,000 to drill each well and that each should yield about 50,000 bbl of oil. Gasco also noted that the current differentials to West Texas Intermediate Crude for Uinta Basin Black Wax Crude, adjusted for transportation and quality, are approximately $16/bbl.
The Uinta Basin is south and east of the Wasatch and Uinta Mountains, fed by a number of creeks and rivers that eventually feed into Green River, a tributary of the Colorado River. Drilling activity grew 33% in the Uinta for the calendar year that ended Jan. 7, 2011, following the pattern of the more well known Piceance, Marcellus and other basins (see Shale Daily, Jan. 11).