Pssst… We’ve Found Tons of Oil in Utah
by Matt Badiali
November 3, 2006
"We kept this very quiet and confidential."
-- Wolverine’s Exploration Manager
Typically, when a publicly traded company makes a major find, it shouts the news from every somewhat respectable media outlet in the world.
But, Wolverine Oil & Gas is a private company, and its find was no average oil discovery. In fact, this tiny company might be sitting on an oil deposit that could rival in size Chevron’s widely heralded deepwater find in the Gulf of Mexico… and cost about 90% less produce.
So, when this company made its discovery in Utah, it didn’t broadcast the news. Instead, management quietly bought as much land in the area as it could afford, before the secret got out and the cost of leases shot through the roof.
But, you can’t keep something like the Covenant oil field quiet for long. Word is beginning to spread through the industry… With oil hovering around $50 a barrel, potentially trillions of dollars are up for grabs.
Oil companies have been exploring and drilling in Utah for years, but have largely been frustrated in their attempts to locate petroleum in the potential oil-rich Utah Hinge region.
The Utah Hinge is the section of a giant fault that runs from just northeast of Salt Lake City southwest across the state and out just east of St. George. The thrust fault formed due to tectonic collisions on the west coast of North America.
The Majors quit exploring there after more than 25 years of looking. “I know the Utah Hinge,” said a good friend and experienced oil explorationist. “That place dropped my drawers, turned me over its knee, and spanked me hard.”
That’s the feeling you get from spending millions of dollars on data and drilling, but come up with dry holes. The place just screams “oil field,” but nobody could find them.
The Majors were in the region throughout the 1970s and 1980s. However, after low oil prices and more fertile basins elsewhere lured away Big Oil, Dr. Alan Chamberlain, founder of CedarStrat Corp., kept at it.
He was convinced that the Majors missed something in Utah. Chamberlain devised a unique approach to stratigraphy in the Great Basin of Nevada and Utah. His approach to these rocks involved detailed mapping, gamma-ray logging, global positioning, seismic, and gravity analyses. He tied all the data to exact points using global positing system on digital aerial photographs and satellite imagery.
Chamberlain’s research led to Wolverine’s 2003 discovery of the Covenant field. And, his results strongly suggest that the Covenant field is part of a trend along the Utah Hinge.
The industry has always believed that the rocks that lie along the fault in Utah should be chock full of light, sweet crude oil.
We now know that in fact, they are.
What’s circulating about Wolverine’s find right now is a mere whisper through the oil exploration community, not audible beneath the CNBC chatter about oil sands and deep-sea discoveries.
But by the time the first publicly traded company unearths the next huge field in this region, it will validate Central Utah as a bona fide oil province, not just a one-trick pony.
I’m watching the work being done in Utah closely. The next time you hear about the Utah in the news, Katie Couric may be telling you about the next American oil rush.
Good investing,
Matt Badiali
Editor's note: Matt Badiali is a regular contributor to DailyWealth, a free investment newsletter focused on the world's best contrarian opportunities. We write with a simple belief in mind: You don't have to take big risks to make big money with your investments.
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