Executive Summary
Granite Energy ("Granite") (GNGI) is a leading independent energy company headquartered in Salt Lake City, Utah, and is focused on oil and gas development, exploration and production. Granite operates according to a unique business model set under strict parameters to enhance success in exploration and exploitation of prospects and to mitigate risk through diversification.
Through extensive analysis and research, the company is minimizing risk by adhering to strict investment criteria of low-to-medium risk drilling opportunities. This same investment strategy applies to the evaluation and acquisition of existing production.
The Company utilizes data gained from new, advanced technologies, including: 3D seismic, remote sensing, geochemical, and state-of-the-art satellite and aerial surveying to amplify the analysis of the geology in a given area. By utilizing the advanced engineering and logging techniques developed by Halliburton and Schlumberger, the Company maximizes its oil and gas reserves and greatly improves production from its wells.
Management Team
Granite Energy prides itself on its management team of highly experienced and skilled industry professionals. The result is excellent performance for its investors.
Granite's management team understands the complexities of the financial services component as it applies to the oil and gas industry. When combined with the expertise of its engineers, geologists and drilling teams – who represent vast knowledge across many compatible technologies – Granite's operations are assured of a higher rate of success. The team studies the industry and industry trends, applying best practices toward the goal of maximum benefit for Granite Energy investors.
Operations
The Company’s current domestic operations have experienced recent success with its drilling programs.
Backed by investor financing and with the aid of HPR, the Company has over 130 prospect leads under
evaluation for its drilling programs on leases in Oklahoma. Drilling operations are currently underway in
Oklahoma. The Company also owns and operates producing leases in Texas and Oklahoma.
The Company expects growth in the immediate future to continue through a combination of acquisitions and development including the drilling and completion of prospects and the acquisition of existing oil and gas properties. Since 2006, the Company and its outside investors successfully drilled 6 of 13 prospects to total dept. These prospects are in various stages of completion. In 2008, the Company is continuing the program on a number of leases that were acquired in 2006 and 2007 and also seeks to acquire existing production that fits within the parameters of its plans for growth. Set forth below are the drilling summaries for the 6 wells drilled to date:
Melissa Hensley #1-17: The Melissa was drilled and completed in the 2nd & 3rd quarters of 2006. After testing, an oil cut of 3-5% resulted in the Hunton formation. H-Petro-R then set a bridge plug above the Hunton and completed in the Mississippian formation for 10 barrels of oil and 100 mcf of gas per day. Financial results to date are in line with pre-drill expectations. Additional re-completion potential is present behind pipe (proved developed – non producing reserve category) in the future for the Prue sandstone and Oswego limestone.
Richard Hensley #1-9: The Richard was drilled and completed in the 2nd and 3rd quarters 2006. After testing, an oil cut of 3-5% resulted in the Hunton formation. HPR then set a bridge plug above the Hunton and completed in the Mississippian formation for 35 barrels of oil and 59 mcf of gas per day. Due to some downhole complications (gas-locking and fluid build up) the Mississippian reservoir was temporally left and a re-completion was made in the Pennsylvanian sandstones and the Oswego limestone .We are now preparing to comingle from all zones (Mississippi, Pennsylvanian & Oswego). We anticipate meeting financial projections.
Brooks Hensley #1-17: The Brooks was drilled and completed in 3rd and 4th quarters of 2006. The initial completion in the Mississippian formation produced 30 barrels of oil and 107 mcf of gas per day before developing downhole problems due to either reservoir formation damage, or down-hole equipment problems. HPR has designed a re-entry operation and plans to make recommendations to rectify the situation. Results to date have been under pre-drill expectations, and may not ever reach such expectations. The Brooks has limited recompletion potential in the Oswego limestone, Skinner and Red Fork sandstones and will be considered after the diagnostics analysis is completed in the Mississippian reservoir.
D.J. Hanks #1-19: The D.J. was completed in the 2nd quarter of 2008. The initial completion into the Mississippian formation resulted with initial potential (IP) of 29 barrels of oil and 100 mcf of gas per day. The D.J. is the only well that has been drilled in the quarter section and should not experience any depletion from offset wells. The D.J. has several good pay intervals from the Pennslyvanian aged rocks (Red Fork sandstone– 6 feet, Lower Skinner sandstone - 14 feet, and 10 feet of Oswego limestone). The DJ Hanks is currently producing at or above pre-drill financial projections.
Tony #1-12: The Tony was drilled in the 1st quarter of 2007 and awaits completion operations. The initial completion into the Mississippian formation is planned for the 3rd quarter of 2008. Comparison of offset producers in the immediate area and detailed log analyses of the Tony reveals almost 500 feet of Mississippian reservoir that had good oil and gas shows during drilling operations (i.e. mud log). The Tony has several proved developed non-producing pay intervals, which include two thin sandstone pays in the Prue and Red Fork, an estimated 40 feet of indicated pay with gas effect in the Oswego, and 16 feet of good quality porosity in the Big Lime. The Tony well should live up to its pre-drill producing rates and estimated cash flows.
Tigershark #2-12: The Tigershark was drilled in the 4th quarter of 2006 and started completion operations in the 3rd quarter of 2007. The Tigershark was drilled on an indicated 3D seismic high for the Wilcox reservoirs. The well ran 150 feet high to the Wilcox before crossing a fault and dropping off low and wet in the Wilcox. Due to a positive drillstem test in the Simpson Dolomite intervals and open hole log analyses, pipe was run and completion operations have begun. Completion operations continue and reporting completion results are premature. It appears that there is oil and gas in the Simpson Dolomite, Viola, Woodford, and lower Sonora reservoirs. Upon acquisition of a salt water disposal well, the company anticipates production that will meet pre-drill financial expectations.
Oklahoma
Throughout the history of the modern oil industry, Oklahoma has been one of the most prolific regions in the world for oil and natural gas production. Oklahoma oil fields are part of the large Mid-Continent Oil Region that spans from central Texas across Oklahoma into eastern Kansas. Oklahoma claims such prolific finds as theCleveland, Red Fork, Glenn Pool, the Osage, Burbank, Cushing, Healdton, Three Sands, Garber, the Greater Seminole, Oklahoma City, among others.
Not only has Oklahoma displayed its prominence in the oil industry through its prolific oil fields but also through pioneering of oil industry technology. Tulsa, Oklahoma became known as the "Oil Capital of the World", through oil production and remaining at the forefront of exploration and development, financing, equipment manufacturing, and provided skills and executive direction to the industry. In 1900 the School of Geology and Geophysics was founded at the University of Oklahoma, it was the first school of petroleum geology in the world. Oklahoma is also the birthplace of the reflection seismic technique. This technique has become a major method of exploration throughout the world.
The first commercially viable oil well in Oklahoma was drilled on April 15, 1897, The Nellie Johnstone No. 1
The success of the Nellie Johnstone No. 1 started an oil rush that could arguably compare to the Gold Rush in California. From 1900-1935 over 8.8 billion barrels of oil were pumped from the Mid-Continent Region. During this time, Oklahoma was consistently a leader in production among its neighboring states.
According to the Oklahoma Corporations Commission, in 2006 Oklahoma had over 82,000 wells in production and produced 62,841,000 barrels of oil, which accounted for 3.3 percent of the total U.S. production. In 2006 Oklahoma produced 1.645 trillion cubic feet of Natural gas accounting for 8.8 percent of the U.S. natural gas production.
Mission
Our mission is:
To build a strong, viable oil and gas exploration, production and real estate holding company through sound investment practices.
To operate with a strong sense of moral, social and environmental responsibility.
To increase and protect value for shareholders.
Granite Energy, Inc. Officers:
S. Matthew Schultz Bruce L. Lybbert |
Jason F. Griffith Evan L. Twede |