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Black Star Petroleum

is a Western Australian based oil exploration and development company.

Black Star has a significant land holding in Banner County, Nebraska USA where it is targeting initial conventional oil production in the first half of 2013. The Nebraska Oil Project represents outstanding potential for growth through early production with elephant country upside.

 

Location of Black Star Petroleum's Nebraska Oil Project

 

The Nebraska Oil Project is within the Niobrara Formation. The oldest significant oil production from the Niobrara in the DJ Basin is the Silo Field (1981) in Laramie County, Wyoming which has produced 10 million barrels of oil and over 8BCF of gas from vertical and non-stimulated horizontal wells drilled in the 1980s.

The Niobrara has recently been the focus for large public independent companies, including Noble Energy Inc. and Anadarko Petroleum Corporation and emerging smaller companies. The Niobrara is commonly compared to the prolific oil producing Bakken Shale.

Early Production Focus

Black Star Oil has an immediate focus on delivering early production from conventional targets. This will involve the drilling of a number of new holes and potentially a number of work overs on existing wells. The Nebraska Oil Project contains approximately 100 historical producing wells with past production of approximately 7.4 million barrels of oil. Many of these wells were abandoned as producers in the past had experienced low oil price environments. Acreage positions are proximal to many proven producers and recent activity utilizing 3D seismic has led to many new discoveries. Black Star Oil has commenced its field studies and many prospective leads have already been identified. New well economics are excellent with low cost re-entry opportunities also possible. Drilling and seismic has been planned to commence in the final quarter of 2012.

Large Scale Secondary Development Opportunity

Additional to the early production opportunities in conventional plays such as the D&J Sands, the Nebraska Oil Project also shows clear potential for large scale developments within the Niobrara formation. The Niobrara, as with the Bakken, are typically developed as horizontal producers. Vertical production scenarios may also be possible in the Niobrara as evidenced on nearby producing fields. Across the Black Star Oil acreage the Niobrara has a well documented resistivity anomaly that correlates directly with a high geothermal gradient, indicative of basement fracture zones. Thermal maturity has been demonstrated and petrophysical work has indicated oil saturations equivalent to those seen in the productive Niobrara development areas in nearby fields. The target depths are shallow at ~5,000 – 6,000 feet (true vertical depth). Black Star Oil will be undertaking further work including collecting core samples of the Niobrara in the planned conventional drilling programme that is targeting early production in the DJ Sands.

Additional information regarding the Nebraska Oil Project is contained in the Technical Report prepared by MHA Petroleum Consultants.


 

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