From Deseret News archives:

'Black gold' flows in Sevier

Strike has residents seeing oil — and dollars — all over

Published: Thursday, Sept. 22, 2005 11:23 a.m. MDT
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SIGURD, Sevier County — The discovery of a major oil field has people in this tiny farm town on the edge of anticipation, driving property values and speculation, real-estate agents say.

The find is easing tight supplies at Salt Lake refineries and providing work for welders, electricians, roughnecks and pump jacks.

But the payoff could make millionaires out of some landowners who never knew there was oil under Sigurd, a Sevier County town of 431 with no traffic lights, grocery store or home mail delivery. The town center is defined by Dave's Country Trading Post, where ranchers' retired greasy cowboy hats hang from the rafters. The ranchers, if they're selling any land, are keeping the mineral rights.

Hope came more than a year ago, when tiny Wolverine Gas & Oil Corp. made an unlikely find that could rank as the biggest onshore discovery in 30 years. Although no one knows for certain how much oil Wolverine will find — and some industry analysts are skeptical — the potential has townsfolk giddy.

"People are convinced there's oil 2 inches under their property," said Malcolm Nash, Sevier County's economic development director. "If Wolverine wanted to put a drill rig in their living room, they'd do it."

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Ranchers hadn't seen a land agent for any oil company show up for more than 15 years after major producers abandoned exploring the region of complex geology 146 miles from any of Utah's other oil fields.

Wolverine, backed by 14 investors, snapped up leases for as little as $5 an acre and sank a producing well in May 2004. Now the Grand Rapids, Mich., company is sitting on a roughly 1,000-acre oil deposit more than a mile underground that shows no sign of quitting. It's paying one extended Utah family, which owns the land and declined comment, one-eighth royalties on the production.

Wolverine believes the deposit could contain 100 million to 200 million barrels of oil in sandstone pores. One of the wells is producing oil on its own pressure, without a pump. Other wells are producing oil consistently without a hiccup — a sign of a large reservoir.

"It was a true wildcat — a very risky well," said Bill Armstrong, president of Armstrong Oil & Gas Inc. of Denver.

Bidding by oil and gas players at government auctions has intensified, and competitors are dangling leases to private landowners worth hundreds of dollars an acre. But they're finding Wolverine snapped up rights to about 600,000 key acres of private and government land spread across central Utah, claiming a near monopoly over a mountainous region about 50 miles long and 20 miles wide.

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Douglas C. Pizac, Associated Press

Water gushes out of a well near Sigurd, Sevier County, from the pressure of oil underneath.

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