Where is Hoss Oil and Gas and What Makes it Special?
HOSS is located in the north-west of Saskatchewan – just across the border from Fort McMurray, Alberta and world’s largest bitumen reserves. The land is flat forest and muskeg, with many lakes, few roads and no existing oil and gas production. The political climate is stable and very business-friendly, with low royalties.
HOSS is special because it is such a massive development opportunity. HOSS lands include oil and gas rights to a single square block of land containing 21.5 Townships or ~200,000 Ha. These lands comprise the first Oil Sands Permits issued in Saskatchewan. The provincial government web sites promote the opportunity as a possible new future for Saskatchewan.
HOSS is special also because it has potential for multi-zone targets and diverse types of oil and gas. The geology includes a complex network of sand lenses and river channels large enough to contain many large reservoirs of medium and light oil. Magnetic maps show strong similarities between HOSS and the highly productive lands to the west. The basement Precambrian granite is relatively shallow, and may offer additional opportunities for rare gases, minerals, thermal energy and fractured rock-oil, similar to northern Alberta.
The first two exploration wells by ICONOIL, drilled in March 2016, proved the existence of a hydrocarbon system within the sands, and provided surprising evidence of very light oil. Although the HOSS land is relatively unexplored and very little seismic is available, the potential exists to tie HOSS wells into settling tanks and pipelines in Alberta. HOSS land is within 30 km of Alberta 881, and very close to Christina Lake and other high-volume heavy oil discoveries with extensive underutilized infrastructure.
Who First Recognized the Opportunity?
In 2012 one of ICONOIL’s current Executive Team was evaluating reserve capacity for land areas in Saskatchewan. He examined well logs from the early 1980s, when ~20 shallow wells were drilled in NW Saskatchewan as part of a search for natural gas.
At the time the original wells were drilled, oil prices had slid to near $20/bbl, while natural gas prices were rising, so oil exploration was receiving no interest. The on-site geologists had lacked experience with oil. Their test methods included washing the core samples with detergent prior to analysis – virtually eliminating any trace of oil.
Nevertheless ICONOIL’s executive noticed that the well-log commentaries did contain anecdotal evidence of oil, and their rock samples recorded the presence of oil. Well log interpretations appeared to misidentify thick seams of underground oil as water, due to the low resistivity of the water. The important transition zones between water and oil were not identified, and substantial deep zones of light and medium oil appear to have been missed entirely.
The opportunity was seized to drill for oil across a vast territory.
What Assets and Knowledge have been acquired to date?
HOSS has acquired all 200,000 Ha of oil permits.
Two exploratory wells have been drilled, with core samples analysed and tested.
The two exploration wells secure ownership of the lands for the next four years, even if no further action is taken.
Two independent evaluations have been completed by petrol-physicists, including detailed analysis of well logs and core samples.
What are the next steps?
- Select sites for an exploratory program, and apply for surface lease and access.
- Drill and establish flow rates & pressure tests over the 2016/17 drilling season. Cash-flow by March 2017
- Begin production of cold-flow oil.
- Conduct seismic testing across the entire fairway
- Complete a comprehensive exploratory program, tying in productive wells as soon as possible.
- Test potential for HEE and Fractured Granite resources, in concert with ICONTECH, PROTON Technologies and the University of Saskatchewan.
How profitable is the Hoss forecast?
Two independent reports from Petro-physicists who have reviewed the new HOSS well logs indicate that the sand channels are very porous and probably include substantial quantities of light oil.
It is difficult to extrapolate to the HOSS lands as a whole, since the geology across this large area is not well delineated. By analogy to the deposits further to the west, it is feasible that a Cretaceous channel discovery on the HOSS acreage could have 8 billion barrels of oil in place. At a recovery rate of 30%, this represents ~2,400 MMbbls of oil recoverable, having a gross value of ~$120 Billion USD at current market prices. Ultimate profits are difficult to assess without more detailed knowledge of the oil accumulation and development plans, but there is obvious potential for very significant returns.
The superior royalty regime in Saskatchewan will help to offset the higher costs of obtaining seismic data and creating new roads and pipelines.
Who's managing Hoss?
The HOSS investment and development strategy is overseen by the IconOil Group’s cross-cutting Executive Team (IconTeam).
Day-to-day executive matters are handled by the senior executive officer:
Grant Strem, CEO
Where to learn more about HOSS?
The HOSS Story provides comprehensive, up-to-date technical information, including:
- Well log from our first exploratory well
- Analysis of 14 older wells on the HOSS lands
- Oil in mud contamination reports
- analysis of nearby infrastructure, (Alberta) with options for tie-in.
- Miscible gas logs
- GCMS report
- Details on the Oil Sands Permits
- Petro-physicist evaluations of two well logs
- Photos of oil including fluoroscope photography
Contact Morgan Brooks at IconOil Group to discuss your interest, and to obtain access to The HOSS Story, tel. (403) 619-8757.