oil shale terminology, page-5

You can come into this stock in three ways: through hope, through geological knowledge of oil shale, or through logic.

Hope! Well, is a bet, and one can be lucky.

Knowledge! The potential of oil shale is only starting to get recognize outside USA. And that is because geos outside USA, based on their knowledge, did not think too highly of oil shale. This thought is translated into their investment decisions.

Logic! Non-geos have little geo knowledge, leaving huge porosity filled with logic. Logic permeates into deductions. Announcements seal those deductions producing a reservoir of stockholders.

All I have are logical deductions. And now the disclaimer. The basis and deductions could be wrong.

1. The oil shale in the Horn Valley is thermally matured. Oil found in Meerenie and Surprise prove this. There is no point to say the province is poor, and this is contrary to what is observed. The fact is, oil is found and we need to deduce why this is so.

Oil shale layer tends to be uniform (determined by TOC, HI, TMAX,VR, etc) because it is formed in a particular era. TOC is 3% but RC said it is 9%. It is because TOC may vary from place to place due to variation in overburden and sentiment intrusion. But, TMAX should be consistent since the organic matter is homogenous within the layer. Contrary, to other views, a high TMAX is not a good thing. TMAX is the maximum temperature required to convert the organic matter to oil. A high TMAX requires more energy, not good for S2 extraction.

We can also extrapolate the TMAX to S1 conversion. A lower TMAX means a lower temperature required for natural conversion of kerogen to oil. Which means, more oil is likely to be found in areas with a lower TMAX; given all other things being equal.

The VR of 1.35 - 1.75 found in HVT proves we have a proven source of thermally matured source kitchen for oil. A VR of >2% will show a propensity for gas.

2. Kerogen to oil conversion is not the only thing required for conventional oil, which is oil that escapes from the oil shale layer. There must be fraccing to allow the oil to free itself from the shale, flow into a reservoir, and a seal to lock in the oil. This is where salt intrusion comes into play. Salt rising into the oil shale causes oil to be dislodged from the shale, and continue movement of the salt pushes the oil into the sandstone layer. Over time some oil uplift into the anticline (Surprise-1), while a great deal may still remain in the lower part of the sandstone - hence the trap 300m below Surprise.

A problem arise when too much salt intrude into the sandstone layer leaving little room for the oil; Johnstone West -1 is an example where the sandstone is pinched by rising salt and the oil shale.

3. Salt is a good seal, and depending on how the salt has moved and, therefore the structure that has been formed, salt could potentially sealed a whole reservoir of oil. This is what we hope for in Surprise, a scenario 3, 100mmboe.

4. Besides conventional oil, there is plenty of oil in the oil shale, because not all have escaped. RC says it is 150m thick and TOC is 9%. I estimate that 9% TOC produces 60litre of oil per tonne. Taking 1/3 of the 150,000sqm basin to be productive gives 150,000 sq km x 1/3 x 150m x 3 (SG) x 0.09 (TOC) x 60 (l/t) divide 159 (l/bbl) = 2,547mmboe.

The problem is, CTP simply don't have the expertise (and of course the money). If you follow the development of oil shale in USA, two companies operating side by side, one produces 1000bpd, the other gets nothing. That one company that produces oil also produces oil in other oil shale areas. It proves one thing. Expertise and technology are well guarded secret.

In summary, we have a source kitchen, natural fraccing of the oil shale and plenty of salt sealing structures creating conventional oil reservoirs, potential for an immense area of unconventional oil still stuck in the source kitchen waiting for someone to get it out, and plenty of organic matter in the siltstone to challenge the next generation of explorers.