Greater Green River Basin : Vermillion Basin

Vermillion Basin 

Our secondary operating area consists of leasehold in the Green River Basin located in an area referred to as the Vermillion Basin.  In this geologic region, we believe there is natural gas trapped in various sands, coals and shales at depths ranging from 2,000 feet to nearly 15,000 feet. The primary target in this area is the over-pressured Baxter Shale at depths to approximately 13,000 feet. We will continue to monitor and evaluate this prospect before allocating further capital to this area.  As of December 31, 2013, we owned a non-operated interest in approximately 35,000 gross (10,100 net) acres in this geologic basin that is prospective for multiple gas bearing reservoirs including the Almond Sandstone and the Baxter Shale. 

The majority of our acreage in Wyoming and Colorado is located on federal lands administered by BLM. Typically these lands are acquired through a public auction and have a primary lease term of 10 years. The U.S. Department of the Interior normally retains a 12.5% royalty interest in these lands. Most of our lands in this area are encompassed within federal operating units approved by the BLM that allow for the orderly exploration and development of the federal lands. In most cases, these federal lands require an annual delay rental of $1.50 per net acre.