Forest Gate Moves on from First Utah Well

Forest Gate Energy has completed production testing of the four shallow zones of the first well on its Crescent Junction property in Grand County, Utah.

Forest Gate has abandoned its first Utah well following production testing that recovered oil at non-commercial rates. As previously reported, The Tidewater State 3-24-2219 exploration well, initially drilled on January 25, 2010, intersected four different potential hydrocarbon-bearing zones totalling 130 feet of potential pay from four shallow zones. Production casing was run to a depth of 1,100 feet.

The four zones of potential oil pay were tested over a twelve-day period. While oil was recovered, the water cut (or percentage of water versus oil) was too high to enable commercial production.

Although commercial production was a requirement to maintain the 2,160 acre Cabot lease, data from the well site and Forest Gate's access to 3D seismic has revealed new leasing and drilling opportunities in the area. These opportunities relate to the Wingate and White Rim formations originally targeted by the company and which offer the greatest potential pay. Forest Gate will continue to expand its interest in the area.

"This is only our first well in the area, and our active presence here has availed us significant new opportunities," said Don Vandergrift, Forest Gate's President and Chief Operating Officer. "Although this well was not an economic success, we have identified from the well's synthetics, water analysis, and 3D seismic, direction for possible new commercial opportunities. In this area, which includes new drilling opportunities, there may be a nearby well work-over opportunity. This nearby well is an existing producer with mechanical challenges".

For the immediate future, Forest Gate will turn its attention to a well-twinning opportunity it has in Cedar Valley, Iron County Utah where it owns 121,000 gross acres.

The initial program in Iron County would involve drilling a 5,000-foot Rush Lake prospect targeting by-passed Dakota sand pay plus deeper Navajo sands. This shallow drilling target would be a re-drill to a 1948 Dakota Sandstone discovery at a depth of 2,800 feet, which was never put in production.