Illinois Basin Project - Overview
The Illinois Basin has historical production of 4 billion barrels of oil and existing infrastructure including oil and gas pipelines with available capacity. Strata-X holds approximately 25,000 net acres in the Illinois Basin which sit on top of and adjacent to several giant oil fields. These oil fields have produced more than 1.5 billion barrels of oil from the same reservoirs Strata-X is targeting.(2) Most of this oil was produced when oil prices were less than $2 per barrel so economical oil flow thresholds were much higher. The chart below shows that more than 80% of the oil in the Illinois Basin was produced long before oil prices began their rise over $2 per barrel in 1972 (1). Most of Illinois’ oil was produced without the benefit of modern drilling and completion techniques. These techniques increase the extent to which reservoirs can now be commercially developed.
To date, the Company has secured 100% of the lease rights to approximately 25,000 net acres in the Illinois Basin. The secured lease rights contain favorable terms and provide an average net revenue interest to the Company of 86%. The Company classifies the Illinois Project into two different opportunities: unconventional horizontal projects in the Devonian aged Lingle and Grand Tower formations such as those being targeted by the Company’s two existing horizontal wells and conventional vertical projects targeting the prolific shallow Mississippian formations of the Illinois Basin.
(1) Illinois State Geological Survey, Illinois Oil and Gas Database, accessed 10/1/2014, www.isgs.illinois.edu.
(2) I.H.S Production data, Enerdeq, www.ihs.com, assessed 10/1/2014. Cautionary Statement: There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources