Big discovery can't all be drilled
August 11, 2022
CASPER — Amid reports that a billion-barrel oil reserve had been discovered in central Wyoming, the company behind the find was quick to explain that it has not, in fact, doubled the known volume of recoverable oil in the state.
Canadian Overseas Petroleum Limited (COPL), an oil and gas company based in Alberta, estimated in January that federal leases it holds in Natrona and Converse counties overlie most of a reservoir containing 1.5 to 1.9 billion barrels of oil.
The company announced Friday that a report it commissioned from an independent consultant, Ryder Scott Company, found approximately 993.5 million barrels of oil in the reservoir, supporting its internal findings. Only a fraction of that oil is recoverable with current technology.
“There’s really a misunderstanding between resources and reserves,” Arthur Millholland, COPL’s president and CEO, said during a call with investors on Monday.
Reserves refer only to oil that can feasibly be extracted. The majority of the oil in the reservoir cannot.
The company’s internal analysis now indicates that the reservoir holds between 1.7 and 2.1 billion barrels of oil, higher than Ryder Scott’s findings. It expects wells to extract about 8-10% of that oil, or 133 to 207 million barrels, before the underground pressure falls too low.
Secondary oil recovery — injecting water or gas to raise that pressure and force more oil out of the ground — typically releases another 10-30% of a reservoir’s oil.
COPL, targeting the high end, hopes the reservoir will ultimately produce about 666 to 826 million barrels of oil (but is unlikely to declare all of that oil recoverable).
Millholland said in a Friday statement that the report from Ryder Scott “validates what we announced at the start of the year and highlights the significant potential of our fantastic Wyoming asset.”
The Star-Tribune was unable to reach a Ryder Scott office familiar with the report.
As some in Wyoming celebrate the discovery, others await more proof. State officials have not yet corroborated the company’s numbers.
The Wyoming State Geological Survey, which regularly appraises oil resources throughout the state, has identified proven reserves — oil with a high likelihood of profitable extraction — of roughly 700 million barrels statewide.
Christina George, the agency’s outreach and publications manager, said in an email to the Star-Tribune that it “does not have additional information to provide” about the COPL discovery, “other than that the upper sands in the Frontier Formation have received a lot of interest in the recent past, and we expect discoveries of reservoirs in Cretaceous-age rocks to continue in the Powder River Basin.”
This story was published on August 10, 2022.