Areas of Exploration
Denver-Julesberg Basin, Colorado
The DJ Basin consists of a large asymmetric syncline of Paleozoic, Mesozoic, and sedimentary rock layers, trending northeast to southwest along the east side of the Front Range. The basin began forming as early as 300 million years ago during the Colorado Orogeny that created the Ancestral Rockies. Oil and Gas have been produced from the DJ Basin since the recovery of oil in 1901 in the fractured Pierre Shale at the Boulder oil field in Boulder County. The DJ Basin currently has more than 20,000 producing oil and gas wells. The Niobrara Shale has been the focus of recent industry activities in the DJ Basin. This tight oil-bearing reservoir is being targeted along with other prospect Cretaceous formations (e.g. Codell Sandstone, Greenhorn Limestone) due to the favorable economics of pairing new technologies: horizontal drilling with multi-stage fracture stimulation technology.
Diversified Resources' strategy in the DJ Basin is to acquire acreage and production capable of increasing cash flow and reserves. The Company uses its expertise in geology and geophysical evaluation to determine favorable drill-site lease acquisition areas. Diversified has begun permitting wells and expects to begin its DJ Basin Drilling program in 2015.
The Company acquired the 640 acre “Timm Lease” and plans to drill both vertically one vertical well and then begin a horizontal drilling program. The lease is prospective for oil and gas in the“J-Sand”, Codell, Niobrara and Hygiene formations
The Garcia Field, Colorado
In 2011, Diversified acquired approximately 4,600 acres in the Garcia Field which is located in the Colorado portion of the Raton Basin. Diversified considers the field to be a significant factor in the Company’s plan for growth. The first well drilled in the Garcia Field, the Maldonado #1, produced 500 mcfpd of gas production from the Niobrara formation during World War II. A liquid stripping plant constructed for the US Government was operational for eight years until the Maldonado #1 was plugged in 1948. Subsequent wells drilled in the Garcia Field were completed open-hole in the Niobrara formation with the tubing hung on the surface casing. Wells were drilled from 650 to 1,500 feet with one Dakota test. The Garcia Field consisted of twenty wells, all of which were drilled, tested for initial production, and shut in. Past impediments to producing the Garcia Field were its location relative to a transportation pipeline and the high BTU Gas. Diversified owns 100% (80% NRI) of 5,241 mineral acres in the field most of which is held by production.
San Juan Basin, Colorado
Diversified closed on the purchase of BIYA Operating, Inc. in October 2014 giving the Company a 100% interest in approximately 10,400 acres in the Horseshoe Gallup Field in the San Juan Basin. Along with the acreage, the Company acquired interest in 48 producing wells, associated production equipment and dozens of potential vertical and horizontal drilling locations. The main target in this area are the Gallup and Tocito Sands as well as the source formation, the Mancos Shale.