EOG Resources may be the Burt Bacharach of high IPs and fat EURs, but sometimes a one-hit wonder will climb into the oil and gas Top 40 charts. One candidate for the latter is MDU Resources Group Inc. and its Cane Creek Unit in Utah’s Paradox Basin, where the company is targeting a potential 100-million-barrel field in a basin the USGS claims could feature an undiscovered 560 million barrels of oil equivalent.

Of specific note is MDU Resources’ Cane Creek Unit #12-1 in Grand County, Utah, which produced a choked down 1,500 barrels of oil per day for the first five months following completion in September 2012. That might not seem big when compared to the 6,000 to 8,000 barrels of oil equivalent per day produced in Eagle Ford shale wells, but those Eagle Ford wells also feature first-year decline rates north of 80%.

In contrast, the Cane Creek Unit #12-1 saw production fall to 1,100 barrels per day with a flowing pressure of 2,000 psi as of June 2013. The well had produced a cumulative 400,000 barrels, prompting MDU to project an EUR of 1.2 million to 1.4 million barrels of oil for the #12-1, which it claims is among the best domestic onshore wells for 2012.

That’s a catchy tune, to be sure.

The question is whether MDU can reprise its solo hit. The company has 12 producers in its Cane Creek Unit, which spans 92,000 net acres in southeastern Utah, (and a drill-in option for 20,000 more) and will add another four wells on a one-rig program in the second half of 2013 as part of a $70-million capital program.

MDU is targeting the penultimate of 30 interbedded clastic horizons in the northwest extension of the basin. Ten of those are considered prospective for hydrocarbons with four especially promising. For second-quarter 2012, MDU generated 210,000 barrels of oil out of its Paradox holdings, up from 127,000 barrels in the prior quarter. Horizontal wells there are drilled in 45 days and can top $9 million with extended laterals.

Other operators in the play include Southwestern Energy Corp., which is seeking a non-gas Top 40 hit of its own outside of the Fayetteville and Marcellus shales. The company should have a rig active in the second half of 2013. Wells in MDU’s Cane Creek Unit are on BLM land, which strings out the permitting process. The upshot is that new results from the Cane Creek are probably unlikely until 2014.

The Pennsylvanian-aged Paradox Basin spans 33,000 square miles across southwest Colorado and southeast Utah. The basin features conventional targets for oil and gas activity, though interest recently has turned to the unconventional Cane Creek shale, which grades from oil in the western, deeper part of the basin, to natural gas closer to the Uncompahgre uplift on the east.

Hydrocarbon reserves are self-sourced in an organic-rich dolomitic shale with inter-bedded mudstones that were sandwiched between salt evaporates as the basin alternated 29 times between deep marine and shallow waters, producing separate clastic intervals from 10 to 200 feet thick overlain by 200 to 400 feet of halite. Tectonic activity and salt domes created extensive natural fractures in the folded and faulted portion of the Paradox.

The basin is an analog in some ways to the Delaware Basin’s Bone Spring in New Mexico and Texas, or the Spraberry Dean in the Midland Basin, though they are not coterminous in time.

Oil and gas operators initially targeted the Cane Creek shale with 11 vertical wells since 1962, leading to discovery of the Lone Canyon field. After 1991, operators used horizontal drilling to develop the over-pressured Cane Creek shale. Folding and faulting make the play a complex target for horizontal laterals. Successful horizontal wells historically generated cumulative production ranging from 300,000 to 500,000 barrels of oil, a recovery level that would be attractive in the Eagle Ford shale.

MDU Resources provides an ensemble approach to business for its shareholders. The company is part natural gas and electric utility, part construction firm, and part E&P. Its E&P unit also includes 127,000 net acres in the Bakken, where it runs a three-rig program, as well as fields in Texas and Louisiana.

The Cane Creek shale is named for an August 1884 incident in Cane Creek, Tennessee, in which local citizens shot two Mormon missionaries and two lay parishioners who were attending services in a farmhouse after the daughter of a prominent local converted to the religion and moved west.

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