Investment fund Patriot Exploration Co. Inc. said Wednesday it will contribute $14.5 million to a joint gas development project in the Big Horn Basin of northwestern Wyoming with Denver-based Bill Barrett Corp. The partnership will cover drilling on more than 160,000 net and 217,000 gross acres in the basin, which the Potential Gas Committee estimates holds 3.14 Tcf of gas but is significantly underexplored.
The agreement calls for Patriot to own a 25% working interest in all leases and in drilling and development activity. Patriot also announced Wednesday it purchased 18,000 acres in the basin from Anadarko Petroleum and will include that acreage in the partnership with the Bill Barrett company. The acquired property is adjacent to land that Patriot and Bill Barrett currently hold.
Big Horn is one of the last remaining Rocky Mountain Laramide basins without hydrocarbon production from a basin-centered gas accumulation. “The Big Horn Basin represents tremendous opportunity for our two companies,” said Patriot CEO Jonathan Feldman. “Even if only a small percentage of the U.S. [Geological Survey] estimates for Big Horn are economically recoverable, it still represents trillions of cubic feet of natural gas.”
Bill Crawford, investor relations manager at Bill Barrett, said the company currently has one well bore and plans to reenter it and recomplete the Mesa Verde. “We are shooting some seismic and plan to drill the first exploration well in the first or second quarter of next year. What we do after that will depend on the results of the seismic and recompletion.”
He noted that the Big Horn has never been tested for the concept of basin-centered gas. “We’ve found some shows in some old wells, and we found some structure, and that’s what we are going to test the concept for. It’s mostly oil fields up there. The big oil fields have been around the rim [of the basin] basically. We just want to see if those gas deposits are blanketed throughout the basin.”
Just about every other basin in the northern Rockies has been tested for basin-centered gas. “Whether we will be able to do it economically and everything else, that’s what the seismic and the exploration tests will show,” Crawford added. “Basin-centered unconventional gas is one of these things that has taken recent completion technology over the last 15-20 years to develop. What Bill Barrett does is try to think outside the box. We are going to do things that other people aren’t really looking at.”
With offices in New York and Houston, Patriot Exploration works with small- to mid-size operators as a working interest partner or lender for a variety of upstream projects in the oil and gas industry. Its investments allow an operator to continue successes in development and workover projects without the frustration of complicated financial arrangements or the worry of losing ownership. Since forming five years ago, Patriot has invested more than $75 million in projects in the western and central United States and in the Gulf of Mexico. By 2009, Patriot plans to invest an additional $150 million to $200 million in growth-oriented domestic projects.
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