Stealth Energy, Inc. (CNSX: SLH), a Canadian-listed independent oil and gas exploration and production company with properties in Wyoming and Montana, similar to companies like Ultra Petroleum Corp (NYSE: UPL) and Exxon Mobil (NYSE: XOM), could be sitting atop significant oil reserves in the Heath Formation within its Montana leases.
Stealth Energy, Inc. (CNSX: SLH) is a Canadian-listed independent oil and gas exploration and production company with properties located in Montana and Wyoming. These properties are estimated to contain significant oil and natural gas reserves that the market may not be fully realizing in its $9.9 million market capitalization, especially given its large land holdings .
Extracting Old Oil Fields with Enhanced Recovery
The Health Formation in Central Montana represents a new and potentially very large oil resource play that several companies are now involved in exploiting. Currently, there are approximately 43 Heath-sourced oil fields in the area producing from seven different reservoirs, including the Heath formation itself, with cumulative production of more than 107 million barrels of oil, according to a geological survey conducted by Three Crown Petroleum.
Total organic carbon values in the region are very high, while vitrinite reflectance data indicates that the formation is at or near peak oil generation. In fact, the area is so promising that some investors are calling it the next Bakken Formation – a very popular rock unit with estimated oil reserves of 3-4 billion barrels and production of some 270 million barrels. If true, this Stealth Energy lease could pay big returns to shareholders down the road.
Naval Petroleum Reserve Begins Flooding Program
Stealth Energy is currently developing approximately 1,200 acres located adjacent to the Department of Energy’s Naval Petroleum Reserve #3 and the Rocky Mountain Oilfield Test Center within the infamous Teapot Dome. The oil field is well-known among oil companies as a potentially huge oil reserve.
Over the past 80 years, the oil field has produced more than 2.5 million barrels of oil, while many experts believe that some 7.5 million barrels could remain underground. Meanwhile, the Naval Petroleum Reserve recently indicated that it would introduce a water and CO2 flood that could significantly increase output for Stealth Energy’s property as well, according to company sources.
Stealth Energy Shows Significant Potential Ahead
The U.S. Department of Energy estimates that the country could generate an additional 240 billion barrels of recoverable oil resources using next-generation EOR techniques. With the recent introduction of CO2 by the Naval Petroleum Reserve #3 near its Teapot Dome property, the company could benefit significantly from increased production over the next year and beyond.
At the same time, Stealth Energy recently completed the initial drilling program for its Trailblazer project in Montana. On September 23, 2010, the 22-1 DeJeager well as spud while the company plans on drilling additional wells through which it will receive a healthy 87% revenue interest. Since these wells are located near wells that had initial production of more than 300 barrels per day, investors are optimistic.
In conclusion, investors looking for a relatively undiscovered oil and natural gas exploration and production company may want to check out Stealth Energy, Inc. (CNSX: SLH). With significant oil reserves and a unique methodology, the company appears to be on the verge of generating significant revenues from several of its properties.