ash creek

Here is a question I asked the elk CEO yesterday.
Good morning,

I am a significant shareholder in Elk.
Could you please tell me if you intend to water flood the 3 wells you have currently applied for APD’s with the wogcc as a preflush to Chemical flooding?

Here is the response.

The 3 APDs (Applications for Permit to Drill) you refer to are all in the 100% Elk owned Ash Creek field in the Powder River Basin in north Wyoming. The APDs are just the first administrative step required to either drill a new well or re-enter and workover pre-existing wells. Elk has previously announced that we are looking at the possibility of re-entering some old wells in the field to evaluate reservoirs encountered but not tested whilst originally drilling to the deeper Shannon reservoir which has now been depleted.

Elk is still undertaking evaluation of this shallow reservoir potential and has yet to make a firm decision on conducting this work; but the candidate wells have been selected and the process of seeking approvals (the 3 APDs) started, so that when the evaluation is completed and if a decision is then made to proceed, we will be able to start the program straight away.

Elk believes that the Ash Creek field may represent an attractive candidate for chemical flooding of the Shannon depleted reservoir, but studies on this are still in progress.

I hope that this explanation helps.

This is the backgroung history of the field taken from the updated ELK website.

Ash Creek Field:

Overview:

Field discovered in 1952 – 8.2 MBBL produced to date from Shannon reservoir
Field was abandoned in 1997 whilst producing 30 BOPD
Elk entered into a 50% joint venture in 2006 as operator
Elk equity interest increased to 100% in 2007
Elk completed leasing all of Ash Creek acreage in 2008
Operations:

There are no current producing operations at Ash Creek – all wells were abandoned in 1997
South Ash Creek (owned by others) is producing 35 BOPD from the Shannon reservoir in a similar but separate structure
Elk is negotiating to obtain copies of all Ash Creek well files with the view to re-enter selected wells
Projects:

Upper Sands:

Opportunity in un-exploited Upper Sand reservoir(s)
A number of additional potential oil reservoirs are present at Ash Creek
Electric logs through the upper sands of the earlier wells indicate high resistivity which can be associated with hydrocarbon bearing formations
Historically, gas has been produced from upper sands to powered and fuel Shannon reservoir oil operations
An existing well with appropriate behind pipe isolation will be considered as a means of testing the upper sands or alternatively, a shallow well will be drilled
Enhanced Oil Recovery:

The Shannon reservoir has the potential to be further exploited by applying tertiary enhanced oil recovery techniques
Chemical flooding is expected to provide the best economic result of the possible EOR options
Elk expects to engage OU to conduct a chemical flood of the Shannon reservoir after it has completed its study of the Grieve Muddy EOR using chemical flooding.