| Montello Resources (TSX.V:MEO an oil | | | | production from a domestic source, it is |
| and gas exploration firm based in | | | | likely that Tennessee Oil and Gas will |
| Calgary, Alberta, potentially has a very | | | | be predisposed to accommodate Montello |
| big problem on its hands. Its the kind | | | | in its application for additional drill |
| of problem most junior explorers only | | | | permits. |
| wish they had. | | | | In the August monthly newsletter of the |
| The company is in the last leg of | | | | Tennessee Oil and Gas Association, the |
| drilling on the John Bowen #2 test well | | | | lead article quotes Montellos intentions |
| in Tennessee, just over a mile from the | | | | from the companys own web site, which |
| site of the now notorious Pryor Oil | | | | seems to demonstrate local support for |
| blowout, after a drill penetrated a | | | | Montello. |
| formation at 2,400 feet that was under | | | | There are good reasons why major oil |
| an estimated 2200 pounds per square inch | | | | companies have steered clear of |
| of pressure. The resulting explosion of | | | | Tennessee. About 215 million years ago, |
| condensates blew the derrick into the | | | | under the heat and pressure of a |
| air, and by the time the EPA showed up | | | | continental collision, the rocks in |
| to take control of the scene, the gusher | | | | northern Tennessee began to bend. When |
| had flowed at rates of up to 12,000 boe | | | | they broke in a series of long, jagged, |
| a day! | | | | parallel lines oil and gas migrated |
| Pryor Oil was all but annihilated by the | | | | from deep in the Earth into cracks and |
| legal and cleanup costs, and for years | | | | folds in the rocks. Prospectors in |
| afterwards, the Tennessee Oil and Gas | | | | Tennessee spend lifetimes tracing the |
| Authority banned any further exploration | | | | patterns of ancient breakage; they call |
| in the region. | | | | it "chasing fractures." |
| That was over 5 years ago, and it has | | | | That makes the reservoir like the one |
| taken that long for Montello president | | | | that produced the Pryor gusher a rarity, |
| Bill Cawker to get the companys ducks in | | | | and big oil companies dont like to waste |
| a row to take another shot at the | | | | time on such locations. Drilling is |
| monster formation. | | | | shallow and cheap here, compared with |
| When it came to putting a property | | | | Texas or Oklahoma, but the biggest |
| package together in Tennessee, fractured | | | | discoveries have topped out at 1,000 |
| ownership and obtuse property | | | | barrels a day, a payoff too small to |
| configurations were enough to alienate | | | | attract large companies. |
| all the usual American Big Oil suspects | | | | ''There are thousands of acres east of |
| for a well with potential of the John | | | | this that have never been drilled,'' |
| Bowen. | | | | added Alan Murrell, one of the owners of |
| The reality is that highly pressurized | | | | Southeastern Energy, the company that |
| formations like the one under Tennessee | | | | discovered an 800 boe/d well in 2004 |
| are merely a technical challenge | | | | near Pickett County. |
| requiring a strategic approach to | | | | 'This has been a hot area to drill in,'' |
| sinking a well. | | | | he said. ''Tennessee is finally getting |
| Montello was delayed in spudding the | | | | the recognition it deserves. It's a |
| John Bowen #2, originally planned for | | | | little Texas, I've always thought.'' |
| January 2007, due to the lead time | | | | Montello, on the other hand, is drilling |
| required to organize specialized | | | | deep in an effort to get a broad |
| drilling equipment for the drilling | | | | understanding of the geophysical |
| program. The drilling contractor is | | | | characteristics of the target ground. |
| Nabors Drilling USA, a subsidiary of | | | | Montello will be drilling to the |
| Nabors Industries (NYSE:NBR). Nabors is | | | | basement (Pre-Cambrian) to the depth of |
| the worlds largest provider of land and | | | | the "Granite Wash Shale to an estimated |
| platform drilling contact services for | | | | depth of between 7000-9500 feet. |
| exploration of oil, gas, and geothermal | | | | This article is intended for information |
| wells. | | | | purposes only, and is not a |
| High-pressure reservoirs are | | | | recommendation to buy or sell the |
| traditionally drilled with large | | | | equities of any company mentioned |
| overbalanced margins to minimize the | | | | herein. It is based on sources believed |
| risk of unplanned reservoir inflow. The | | | | to be reliable, but no warranty as to |
| high pressures associated with these | | | | accuracy is expressed or implied. The |
| influxes can result in larger kick | | | | opinions expressed in the article are |
| volumes, reduced reaction time and | | | | those of the author except where |
| consequently, greater risk. Challenges | | | | statements are attributed to individuals |
| associated with these overbalanced | | | | other than the author, in which case the |
| margins serve to increase loss of | | | | opinions are those of the individual to |
| circulation risk, resulting in | | | | whom they are attributed. |
| high-pressure kicks, differential | | | | The author and are not shareholders in |
| sticking and wellbore damage, never mind | | | | the companies herein mentioned, and the |
| environmental accidents like the one | | | | author, as an employee of Resourcex |
| involving Pryor Oil in 2002. | | | | Publishing Corp is expressly prohibited |
| Domestic supplies of hydrocarbon energy | | | | for owning any securities about which |
| are a new priority for George Bush and | | | | they may write for a period of 30 days |
| the U.S. government. The upside for | | | | prior to and 30 days after initial |
| Montello is that should this first well | | | | publication of the article in which the |
| result in the safe oil and gas | | | | securities of any company are mentioned. |