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