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  • mutinycapital mutinycapital Nov 15, 2012 10:00 PM Flag

    The Chinese are coming

    Is Chinese Firm Next Player In Southern Alberta Bakken Oil Field?

    By Darryl L. Flowers
    Published: Tuesday, November 13, 2012 4:20 PM CST
    The Sun Times received a press release just prior to deadline stating that Eco-Trade Corporation, an independent oil and gas exploration company, has signed a Letter of Intent to purchase the rights for the “exploration, drilling and production” on a property in Lewis and Clark County, near Great Falls.

    The press release goes on to say that property covers 5,800 acres in the South Alberta Prospect. The property is located in the southern part of the Alberta Bakken Fairway, which is at least 175 miles long (north-south) and 50 miles wide (east-west), and which extends from Alberta southwards through Montana’s Glacier, Toole, Pondera, Teton and Lewis & Clark counties.

    The Sun Times attempted to contact Eco-Trade for more details. At deadline the newspaper had not received a reply.

    According to the Eco-Trade website, the company is headquartered in Columbia, SC.

    *
    Upon further research, Eco-Trade appears to have ties to Yasheng Corporation, a Chinese firm with offices in California. Yasheng, according to a company press release, has 15,000 employees and reported $656 million (USD) in revenue in 2007. “The company competencies include financial services, mergers and acquisitions, accounting, real estate development, and natural resources exploration,” the press release reads. The release goes on to say that Yasheng ECO-Trade counts Tsingtao Beer, KFC (Kentucky Fried Chicken) and McDonalds among its customers.

    A business entity search with the California Secretary of State revealed that Yasheng Eco-Trade has offices in Beverly Hills, but was, in fact, registered in the state of Delaware. Many corporations register in Delaware, thanks to favorable state corporate tax rules.

    The Sun Times was contacted by a source with knowledge of oil and gas exploration in the region who reported that the property is located south of Augusta.

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    • FYI, there's an update on the front page of the Sun Times' website that is very informative.

      • 3 Replies to mutinycapital
      • The Sun Times had identified the minerals being pursued by Eco-Trade as lying in Lewis and Clark County, south of Augusta. The newspaper had identified a specific well that was in the area of interest, but decided to withhold the details, awaiting confirmation.

        In a subsequent press release, Eco-Trade identified two key wells in the area of interest.

        The wells are the Krone 21-32 (C NW NE 23-18N-5W) and the Steinbach 1 (E2 SE NE 22-17N-6W).

        The Krone 31-32 was drilled in 1962, to a depth of approximately 7,800 feet, by Shell Oil Company. The well was abandoned late that year. According to records at the Montana Board of Oil and Gas Conservation, the drilling rig encountered the Kootenai, Swift, Madison, Bakken, Three Forks and Nisku Formations.

        In May, 1984, Atlantic Richfield Company “spudded” the Steinbach 1 well. The well was abandoned in 1985. However, later in 1985 the company filed a Permit Modification with the Board of Oil and Gas to drill deeper, expanding the Total Depth to 11,000 feet. In March of 1986 the well was abandoned again.

        In the new release from Eco-Trade, the company states: “Eco-Trade Corp. (OTCQB:BOPT), which previously announced a letter of intent to develop the South Bakken Prospect, highlighted some of the key findings about the Prospect’s advantages including:

        a) It is located in the prime thermal maturity zone, where Vitrinite Reflectance (Ro) is between 0.7% and 1.5%. This is where oil generation in the Bakken is at its highest level.

        b) The Bakken is relatively shallow in the prospect area. In a key well, the Krone 31-32 on the north side of the prospect, the Bakken is at 6,896’, has 400 ohms of resistivity, and Total Oil Content 10%. To the southwest of the Krone 31-32 is the Steinbach # 1 that has 2,000 ohms of resistivity in the Bakken. These are among the best resistivity readings recorded in the Bakken Fairway.

        c) The 5,806 net acres of South Bakken Prospect mineral leases are in the immediate area of the key wells with the best resistivity and vitinite reflectance, the Krone #31-32 and the Stienbach # 1.

        d) The essential Middle Member of the Bakken, the Sappington Silt, is well developed and up to 30’ thick, with porosity between 3-15%, and permeability up to 20 md (millidarcies).

      • When asked his thoughts on the data readings from the two wells, Large first cautioned that any definitive interpretations would require an examination of the well original log information.

        However, based on the data presented in the release, Large was of the opinion that there was reason to be optimistic.

        In explaining the numbers presented in the Eco-Trade press release, Geologist Large said that the first number mentioned, the vitronite reflectance, is a measure of the “glassy” appearance of the rock taken in a core sample. “That number is an indication of the maturity of the rock,” he said. “That range, .7 - 1.5, would be in the ideal zone.”

        The resistance in the Krone well, according to Large, is somewhat low at 400 ohms. “The resistance is an indication of the amount of water mixed with the oil in the “reservoir rock”. The water found in an oil well, being seawater, would naturally have a high salinity, which is a good conductor of electricity, while oil is a poor conductor, with a higher resistivity. “The higher resistivity, the better the well.” The Steinbach well, with a resistivity of 2,000 ohms, puts the well in the same range as wells found in Eastern Montana.

        The porosity, in this case said to be in the range of 3 percent to 15 percent is a measure of the open space within the content of the rock, a measure of the amount of gas or liquids that can be held in the formation. “Twelve percent would be on the high side in, for example, Richland County,” says Large.

        Large described the permeability, measured in millidarcies, or md, is a measure of the flow of fluid through the formation. “The higher the number, the better,” said Large. He added “In Eastern Montana, we would expect to see a reading of one millidarcie, so a well showing a reading of 20 would be a great find, assuming that the numbers we have are accurate.”

      • Last week the Sun Times reported that a new player had entered the search for oil in the Southern Alberta Bakken.

        The Sun Times had reached out to the company before the story went to press. The company contacted the Sun Times shortly after the issue had hit the streets. According to the company email, Eco-Trade is not associated with Yasheng Group, Inc. “Yasheng failed to meet due diligence,” the email read. “We are an American company with mostly American investors,” the email added.

        The Sun Times has verified this. According to the company’s Form 10-K, filed with the U.S. Securities and Exchange Commission, for 2011, “The Company entered into a series of agreements with Yasheng. Yasheng failed to comply with the Company’s due diligence procedures, and as such terminated the definitive agreement with the Company in November 2009.”

        The Sun Times had identified the minerals being pursued by Eco-Trade as lying in Lewis and Clark County, south of Augusta. The newspaper had identified a specific well that was in the area of interest, but decided to withhold the details, awaiting confirmation.

        In a subsequent press release, Eco-Trade identified two key wells in the area of interest.

        The wells are the Krone 21-32 (C NW NE 23-18N-5W) and the Steinbach 1 (E2 SE NE 22-17N-6W).

        The Krone 31-32 was drilled in 1962, to a depth of approximately 7,800 feet, by Shell Oil Company. The well was abandoned late that year. According to records at the Montana Board of Oil and Gas Conservation, the drilling rig encountered the Kootenai, Swift, Madison, Bakken, Three Forks and Nisku Formations.

        In May, 1984, Atlantic Richfield Company “spudded” the Steinbach 1 well. The well was abandoned in 1985. However, later in 1985 the company filed a Permit Modification with the Board of Oil and Gas to drill deeper, expanding the Total Depth to 11,000 feet. In March of 1986 the well was abandoned again.

        In the new release from Eco-Trade, the company states: “Eco-Trade Corp. (OTCQB:BOPT), which previously announced a letter of intent to develop the South Bakken Prospect, highlighted some of the key findings about the Prospect’s advantages including:

        a) It is located in the prime thermal maturity zone, where Vitrinite Reflectance (Ro) is between 0.7% and 1.5%. This is where oil generation in the Bakken is at its highest level.

        b) The Bakken is relatively shallow in the prospect area. In a key well, the Krone 31-32 on the north side of the prospect, the Bakken is at 6,896’, has 400 ohms of resistivity, and Total Oil Content 10%. To the southwest of the Krone 31-32 is the Steinbach # 1 that has 2,000 ohms of resistivity in the Bakken. These are among the best resistivity readings recorded in the Bakken Fairway.

        c) The 5,806 net acres of South Bakken Prospect mineral leases are in the immediate area of the key wells with the best resistivity and vitinite reflectance, the Krone #31-32 and the Stienbach # 1.

        d) The essential Middle Member of the Bakken, the Sappington Silt, is well developed and up to 30’ thick, with porosity between 3-15%, and permeability up to 20 md (millidarcies).

        e) Major oil companies are aggressively purchasing mineral leases and drilling in the Bakken Fairway including Rosetta Resources, which has drilled over 6 exploratory wells and confirms “significant oil hydrocarbons in place, 13-15 MMBOE per section, and over-pressured reservoirs”.

        f) Analyst Wood Mackenzie estimates that there is 2.3 Billion BBL to be recovered in the Bakken Fairway, and concurs with Rosetta that there is 10-15 MMBO per section recoverable.

        g) The prospect area is easily accessible, serviced by many highways and nearby towns, and the land itself is largely gentle rolling hills.

        h) Drilling depth for much of the area is 8,000 feet or less, and drilling costs will be less than a third of a Williston Basin

        since I can't post a link..

        if the well info is correct, that one press release gives us more well specific data than Primary ever has.

    • Update from the Sun Times. Interesting information.

      Eco-Trade Details Oil Prospects; Updates Sun Times Report on Chinese Connection

      Approximate location of the two wells described as being in the “area of interest” by Eco-Trade.
      By Darryl L. Flowers
      Published: Tuesday, November 20, 2012 4:29 PM CST
      Last week the Sun Times reported that a new player had entered the search for oil in the Southern Alberta Bakken.

      The Sun Times had reached out to the company before the story went to press. The company contacted the Sun Times shortly after the issue had hit the streets. According to the company email, Eco-Trade is not associated with Yasheng Group, Inc. “Yasheng failed to meet due diligence,” the email read. “We are an American company with mostly American investors,” the email added.

      The Sun Times has verified this. According to the company’s Form 10-K, filed with the U.S. Securities and Exchange Commission, for 2011, “The Company entered into a series of agreements with Yasheng. Yasheng failed to comply with the Company’s due diligence procedures, and as such terminated the definitive agreement with the Company in November 2009.”

      The Sun Times had identified the minerals being pursued by Eco-Trade as lying in Lewis and Clark County, south of Augusta. The newspaper had identified a specific well that was in the area of interest, but decided to withhold the details, awaiting confirmation.

      In a subsequent press release, Eco-Trade identified two key wells in the area of interest.

      The wells are the Krone 21-32 (C NW NE 23-18N-5W) and the Steinbach 1 (E2 SE NE 22-17N-6W).

      The Krone 31-32 was drilled in 1962, to a depth of approximately 7,800 feet, by Shell Oil Company. The well was abandoned late that year. According to records at the Montana Board of Oil and Gas Conservation, the drilling rig encountered the Kootenai, Swift, Madison, Bakken, Three Forks and Nisku Formations.

      In May, 1984, Atlantic Richfield Company “spudded” the Steinbach 1 well. The well was abandoned in 1985. However, later in 1985 the company filed a Permit Modification with the Board of Oil and Gas to drill deeper, expanding the Total Depth to 11,000 feet. In March of 1986 the well was abandoned again.

      In the new release from Eco-Trade, the company states: “Eco-Trade Corp. (OTCQB:BOPT), which previously announced a letter of intent to develop the South Bakken Prospect, highlighted some of the key findings about the Prospect’s advantages including:

      a) It is located in the prime thermal maturity zone, where Vitrinite Reflectance (Ro) is between 0.7% and 1.5%. This is where oil generation in the Bakken is at its highest level.

      b) The Bakken is relatively shallow in the prospect area. In a key well, the Krone 31-32 on the north side of the prospect, the Bakken is at 6,896’, has 400 ohms of resistivity, and Total Oil Content 10%. To the southwest of the Krone 31-32 is the Steinbach # 1 that has 2,000 ohms of resistivity in the Bakken. These are among the best resistivity readings recorded in the Bakken Fairway.

      c) The 5,806 net acres of South Bakken Prospect mineral leases are in the immediate area of the key wells with the best resistivity and vitinite reflectance, the Krone #31-32 and the Stienbach # 1.

      d) The essential Middle Member of the Bakken, the Sappington Silt, is well developed and up to 30’ thick, with porosity between 3-15%, and permeability up to 20 md (millidarcies).

      e) Major oil companies are aggressively purchasing mineral leases and drilling in the Bakken Fairway including Rosetta Resources, which has drilled over 6 exploratory wells and confirms “significant oil hydrocarbons in place, 13-15 MMBOE per section, and over-pressured reservoirs”.

      f) Analyst Wood Mackenzie estimates that there is 2.3 Billion BBL to be recovered in the Bakken Fairway, and concurs with Rosetta that there is 10-15 MMBO per section recoverable.

      g) The prospect area is easily accessible, serviced by many highways and nearby towns, and the land itself is largely gentle rolling hills.

      h) Drilling depth for much of the area is 8,000 feet or less, and drilling costs will be less than a third of a Williston Basin well.

      The prospect offers an excellent opportunity to participate in the phenomenal Bakken oil boom. It has all of the potential upside of the enormous oil production the Bakken formation offers without the phenomenal cost of entry now being experienced in the Williston Basin.

      In reviewing the drilling history of the Steinbach 1 well, the Sun Times confirmed the rig did indeed make contact with the Sappington Formation. The well also encountered the Virgelle Sandstone, Telegraph Creek, Blackleaf, Kootenai, Morrison, Swift, Sawtooth, Mission Canyon, Lodgepole, Three Forks, Potlatch Anhydrite, Jefferson, Souris River, and Cambrian Undifferentiated. At the lowest level, the driller encountered an “Igneous Sill.”

      An Igneous Sill is a horizontal event that occurs when volcanic magma, rising vertically through a geologic structure known as a “dike”, finds a path between formations.

      In the Steinbach 1 well, the Igneous Sill was contacted 4 times at various depths, as was the Jefferson Formation.

      The Sun Times met with Joe Large, a Petroleum Geologist with RPM Geologic, based in Denver, for an interpretation of the well data.

      According to Large, the contact with the same formation repeats when drilling through “overthrusts”. “In that region, where the western plate has contacted, and slid over the eastern plate, it’s typical to find repetitive contacts with the same layers, or formations.” Large added that the overthrusts that define the Rocky Mountains along the Eastern Slope are not limited to the surface: “Those same features we see as we look to our west occur thousands of feet below us as well.”

      Asked why an Igneous Sill was contacted so often during the drilling, Large explained that it most likely meant a lot of faulting deep underground. “The faulting opened the channels through which the magma was able to find its path.”

      According to the Board of Oil and Gas Conservation database, only 30 wells are listed in Lewis and Clark County. The most recent well, drilled in 2012, the Barr Ranch “Well 1” is a water source. On December 1, 2012, a well was drilled to a depth of 700 feet located at 6-20N-7W. The operator is listed as Lewis and Clark County.

      The last confirmed oil or gas well was drilled in 2005. The Sieben Ranch 14603-12 was drilled by Suncor Energy (Natural Gas) America, Inc. to a Total Depth of 16,000 feet. The well, located at NW SW 3-14N-6W, southeast of Lincoln, included a single horizontal leg.

      When asked his thoughts on the data readings from the two wells, Large first cautioned that any definitive interpretations would require an examination of the well original log information.

      However, based on the data presented in the release, Large was of the opinion that there was reason to be optimistic.

      In explaining the numbers presented in the Eco-Trade press release, Geologist Large said that the first number mentioned, the vitronite reflectance, is a measure of the “glassy” appearance of the rock taken in a core sample. “That number is an indication of the maturity of the rock,” he said. “That range, .7 - 1.5, would be in the ideal zone.”

      The resistance in the Krone well, according to Large, is somewhat low at 400 ohms. “The resistance is an indication of the amount of water mixed with the oil in the “reservoir rock”. The water found in an oil well, being seawater, would naturally have a high salinity, which is a good conductor of electricity, while oil is a poor conductor, with a higher resistivity. “The higher resistivity, the better the well.” The Steinbach well, with a resistivity of 2,000 ohms, puts the well in the same range as wells found in Eastern Montana.

      The porosity, in this case said to be in the range of 3 percent to 15 percent is a measure of the open space within the content of the rock, a measure of the amount of gas or liquids that can be held in the formation. “Twelve percent would be on the high side in, for example, Richland County,” says Large.

      Large described the permeability, measured in millidarcies, or md, is a measure of the flow of fluid through the formation. “The higher the number, the better,” said Large. He added “In Eastern Montana, we would expect to see a reading of one millidarcie, so a well showing a reading of 20 would be a great find, assuming that the numbers we have are accurate.”

 
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