Projects

Black Stallion has secured the right to acquire 50% ownership in the large 12,233-acre Woodrow Prospect in Teton county, northwest Montana, within the Alberta Basin Bakken fairway.

The Company’s 51-101 report (June 2014) estimates the Woodrow Prospect to represent net recoverable prospective resources for Black Stallion of 80.8 million barrels of oil (MMBO) and 16.9 billion cubic feet of natural gas (Bcf).1

Located due west of Williston Basin’s prolific Montana-North Dakota Bakken, the Alberta Basin Bakken is expected to deliver ~2 to 3 billion barrels of recoverable oil.2

The province surrounding the Woodrow Prospect, meanwhile, may contain as much as 1 billion barrels of oil recoverable (Sandomierski et al., 2002).1

Advances in horizontal drilling and other modern techniques are being applied within the Alberta Basin Bakken, which features 20-30′ of pay in its critical Middle Member (Sappington) compared to an average pay of 10′ in the Williston Basin.3

Proximity to Production & Activity

Over 280 MMBO has been produced to date from 3 large fields between 12 to 40 miles from the Woodrow Prospect within the Alberta Basin Bakken.4

Interest in the Alberta Basin Bakken over the past few years has resulted in major industry players investing in excess of $180 million to acquire land in the fairway’s southern region,5 close to the Woodrow Prospect.

Among the companies that have invested in the play are ExxonMobil (NYSE:XOM | Market Cap: $405.57B), Shell (NYSE:RDS.A | $228.06B), Occidental (NYSE:OXY | $68.72B), Encana (NYSE:ECA | $13.58B), and Crescent Point Energy (TSX:CPG | $16.38B), who is currently conducting high-impact exploration for conventional and unconventional oil opportunities.6

Exploration activity nearby the Woodrow Prospect has included a $41M exploration program on an adjoining acreage, consisting of 3-D seismic, a 7 vertical well program, and a 3 horizontal well drilling program.7

The Woodrow Prospect is ~6 miles from good pipeline infrastructure, which has served Canadian production and the once prolific Cut Bank oil and gas field;8 within 12 miles from the Pondera Field (30 MMBO); and 40 miles from a refinery at Great Falls, Montana.1

[For a full profile of the Alberta Basin Bakken, see the Region section.]

Horizons & Exploration Potential

In June 2014, Black Stallion received a 51-101 report from B.L. Whelan, P. Geo. on the 12-lease Woodrow Prospect.1

The author reviewed the available technical data, reports derived from the public domain, and information from wells within the leases and currently producing wells in adjacent fields.

The Whelan report concludes the Woodrow Prospect offers multiple opportunities for success in oil and gas production across multiple potential targets at shallow depths.

The report also recommends an exploration program be carried out on the leases to determine the potential hydrocarbon content of the various formations.1

Black Stallion is currently developing an exploration program to better determine the Woodrow Prospect’s production potential.

The initial phase of the exploration program is expected to include 3-D seismic procedures and computer treatment of geological and geophysical data.

Geology & Targets

The multi-reservoir Woodrow Prospect lies along the eastern flank of the productive Sweetgrass Arch and at the western end of a province of heavy oil shows in the Jurassic Swift sandstone.

The area is considered to be of high potential due to the possibility of traps in multiple zones.

The prospect’s shallow-depth targets include both heavy oil in the Jurassic Swift Formation (estimated at 1,500′), conventional oil in the Sun River (~1,800′), Devonian Duperow and Nisku (estimated at 3,000′ to 3,200′), and the Mississippian Bakken (estimated below 2,000′).

The prospect also represents potential gas production from the Duperow as well as the Cretaceous Blackleaf, Cretaceous Bow Island, Dakota, and Cutbank Sands that are found at depths of less than 1,000′.1

Nearby Production & Prospect Shows

A major target of the Woodrow Prospect is the prolific Sun River Dolomite, which produces oil (30+ MMBO from ~350 wells) and gas at depths between 1,900′ to 2,000′ roughly 12 miles to the northwest in the Pondera Oilfield.

A recent New Miami horizontal well to the northwest was successfully completed in the Sun River Dolomite with oil production tests in excess of 150 barrels of oil per day (bopd) next to vertical offsets producing 10 bopd, which indicates the economics of the Swift can be enhanced by horizontal drilling and completions.

Within the Woodrow Prospect leases, oil and gas have been produced from the Sun River in 4 wells.

The Swift Formation has produced 1.5 MMBO in 2 fields 15 miles to the prospect’s northeast.

Within the Woodrow Prospect leases, the Swift is well developed with a section that is typically 25 to 53′ thick, saturated with oil throughout, and possessing excellent porosity (14-30%) over large areas of the prospect.

Reports of oil in the Swift have come from 3 wells drilled on the prospect.

Other hydrocarbon shows within the prospect have been associated with the Bow Island, Nisku and Duperow targets for a total of 12 wells within the Woodrow Prospect having hydrocarbon shows with 6 of those being vertical producers.1

The Bakken Formation continues to attract active leasing from various companies,1 including Anadarko Petroleum (NYSE: APC | $44.85B) taking 7 new Alberta Bakken permits and assuming ownership of 3 others in Toole County, Montana, in June 2014.9

DeeThree Exploration (TSX: DTX | $591.62M), meanwhile, has discovered an oil pool in the play running 14 miles long and 4 miles wide; had drilled 28 horizontal wells in the play as of year-end 2013 with reported production of ~4,000 barrels per day of light oil; and planned on drilling 18 more wells in the Alberta Bakken in 2014.10

Bakken reserves can exceed 5 MMBO per section, and often near 10 MMBO.1

Exploration & Development Program

The Company’s initial exploration phase includes plans for a new 3-D seismic program and computer manipulation of data to determine the hydrocarbon potential of the leases.

Following the seismic survey, a vertical well will be drilled to test the section. Depending upon the results discovered in the vertical well, a horizontal well program could be initiated to develop the various potential productive zones.

In particular, the Duperow should be considered for a horizontal drilling program to maximize the production potential.