CARSON CITY — Sierra Nevada Oil LLC announced last week it staked three additional well locations near Gabbs in the vicinity of their Paradise 2-12 discovery well, which the company said is producing the first oil in western Nevada.
Sierra Nevada Oil and Empire Petroleum have 36,750 acres under lease with the U.S. Bureau of Land Management on a large surface anticline in Gabbs Valley straddling Nye and Mineral counties. Sierra Nevada recently acquired an option for a controlling interest in Empire.
In a press release, the company projects potential reserves in the geologic zone of 139 million barrels. The three locations will be evaluated to determine an optimal site for a “Fourth of July” well planned to be drilled this summer.
Northern Nevada Business Weekly reported company co-manager oilman Ed Traub was a laughingstock for two decades over his belief there’s oil in the remote hills between Fallon and Gabbs. The publication said Empire Petroleum and Sierra Nevada Oil have been producing 15 to 20 barrels of oil per week from the well. The company plans to drill a deeper well to test a formation 9,000 feet deep. Earlier production came from a 3,700-foot well.
Nevada is not a major oil producer. In 2013 the state had annual oil production of 335,672 barrels, of which all came from Nye County except 44,149 barrels from two oil fields in Eureka County.
Lowell Price, Nevada Division of Minerals oil, gas and geothermal program manager, said he hasn’t received any production reports yet on the well.
“Their production is very, very minimal, just probably a few barrels a day, however the well is currently shut in. They shut it in for the winter to my knowledge. In fact, I just inspected those three wells they have out there probably two to three weeks ago. Nothing was being produced at the Paradise 2-12 well, that’s the only one where they might have some production,” Price said.
The reason for shutting it down wasn’t because of problems accessing a site in the winter, but because the oil has a high paraffin content that causes oil to congeal in colder weather, he said.
“Rather than them addressing this issue over the cold months, over this last year, they decided to shut in and then they’ll fully address it in the coming year with the proper facilities,” Price said.
When it came to the claims there could be 139 million barrels, Price, who was formerly in oil and gas exploration, said, “you just really don’t know until you drill.”