Wildcatter claims huge oil find

A small independent oil company claims there could be as much as 1 billion barrels of oil under its half million acres in central Utah. Just outside of the town of Sigurd, the discovery well is 100 miles from any of Utah’s major oil fields and 45 miles from the nearest producing well in an area that has been abandoned by the majors.

Michigan-based Wolverine Gas and Oil, which is a privately held company with 25 employees, bought the leases from Chevron in 1999 and has two producing wells on the property to date, yielding a total of about 1,500 barrels of high quality crude per day.

Even if Wolverine’s claims come dry, because of Wolverine’s announcement the state of Utah may hit pay dirt at a lease sale set for May 17 in which 300,000 acres will be up for bid.

Wolverine discovered oil in late 2003 and by May 2004 was producing from a reservoir it estimates contains 100 million to 200 million barrels of oil. According to press reports, the company is examining 25 prospects on their acreage that in all could contain 1 billion barrels of oil.

In a May 4 Dow Jones report, Tom Chidsey, petroleum section chief for the Utah Geological Survey, said Wolverine’s prospects were widely scattered over a crescent-shaped belt 100 miles long and up to 50 miles wide that contains all the geologic “right stuff” for oil pockets in folds of Jurassic Navajo sandstone.

But some industry analysts have their doubts about the size of the find in an area that has yet to be fully explored by Wolverine.

Oppenheimer & Co. senior oil analyst Fadel Gheit said the expectation of 1 billion barrels was highly unlikely.

“It’s just very highly unlikely because the U.S. onshore has been picked clean, if you will,” Gheit said. “That’s like finding a wallet in the subway after all the cleaners went through it. It’s possible, but very highly unlikely.”

Chidsey said Wolverine’s discovery could dwarf Utah’s last major discovery, the Pineview field which crosses over into Wyoming. Pineview came online in 1975 and has produced 31 million barrels to date and may contain an additional 100 million barrels, he told Dow Jones.

Currently Wolverine has no pipelines to move oil from the field; it is being trucked 130 miles to Salt Lake refineries.

“The secret’s out and we will face competition” at the next BLM auction, Doug Strickland, a geologist for Wolverine, told Dow Jones. “We had a year and three months to ourselves.”

Acres that Wolverine once picked up for $10 are now being valued at $1,200 in central Utah, Dow Jones said.

—Kay Cashman