Remaining Oil & Gas Potential of the Paradox Basin, Southeast Utah: Cane Creek Shale and Carbonate Algal Mound Reservoirs of the Pennsylvanian Paradox Formation, Salt Tectonics, Natural Fractures, Well Stimulation Methods, and Reserve Estimates

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     Unlike most Rocky Mountain sedimentary basins, the Paradox Basin is an evaporite basin that contains thick salt accumulations and features salt tectonics. Salts are ductile at low temperatures and pressures. The basin is located mostly in southeast Utah and southwest Colorado, but extends into northeast Arizona and northwest New Mexico. It is 33,000 square miles in extent with sediments as thick as 15,000 feet. The basin is a major source of potash, copper, and uranium. Most past oil production has been from the southern part of the basin from carbonates, including algal mounds, of Pennsylvanian age. More recent production in the northern part of the basin in Utah, in the Fold and Fault Belt, has been found in the Cane Creek Shale of the lower Pennsylvanian Paradox Formation.

     A 2019 AAPG analysis of newly extracted cores from the Cane Creek section described it as:

“…a heterolithic unit comprised of meter-scale cycles of anhydrite, anhydritic dolomitic mudstone, silty dolomite, very fine-grained sandstone to siltstone, and organic-rich calcareous mudstones. Thick beds of overlying and underlying halite provide regional seals and overpressure to the reservoir, and naturally occurring fractures are important for system permeability. Siliciclastic deposits are predominantly bioturbated and contain climbing current ripples, bidirectional cross-stratification, and mud drapes along ripple foresets, all suggestive of tidal depositional processes.”

“Source rock analyses indicate the northern CC is within the oil window (VRo ~0.80) with up to 20 wt% TOC in several thin shale beds.”

“Although total oil production from the CC is only about 8 MMBO, current estimates of the undiscovered resource is about 215 MMBO. With advancements in horizontal drilling, reservoir characterization, and reduction of structure related risks, the CC has the potential to become a significant resource play.”

     The figure below shows the Paradox Basin in 2003, before horizontal drilling in the Cane Creek commenced. It shows the location of some of the carbonate algal mound production.

     According to a 2021 report by the Utah Geological Survey’s Michael Vanden Berg, horizontal wells in the Cane Creek are capable of producing up to 1500 barrels per day. 

     Early drilling through the Cane Creek section encountered some strong hydrocarbon shows but was mostly disappointing. Early horizontal wells in the late 1990s had some success, but more successful horizontal wells were drilled in the Cane Creek in the mid-2010s. He notes that horizontal drilling success without hydraulic fracturing, as has been done in the area, remains challenging due to salt tectonics affecting natural fracture networks:

“However, the clastic (sandstone/shale/anhydrite) target zones are interbedded with several hundred feet of mechanically ductile salt layers. Over time, through the natural burial process, overburden pressure and regional stress regimes have caused the salt layers to flow like toothpaste, creating significant macro- and micro-structures within the reservoir zones. These heterogeneous structures make it difficult to predict natural fracture networks, fracture orientations, and subsequent horizontal well paths.”

     He notes that there are unique challenges to hydraulically fracturing horizontal wells in this interval, namely, avoiding salt interactions:

“The challenge in the Cane Creek is the limited thickness of the clastic zones, often only about 100 feet or less, and their bounding by salt. Typical hydraulic fracturing techniques would send fractures into the over-and underlying salt layers, which would mobilize the salt and clog any existing or created fractures, shutting down production.”

     The Utah Geological Survey began teaming up with Zephyr Energy in late 2020. Vanden Berg notes:

“The Cane Creek play has experienced some success over the years, with production totaling over 10 million barrels of oil since the first wells were drilled. However, there is an estimated 1.2 billion barrels of potential oil (barrels of oil equivalent, which includes natural gas) in the Cane Creek, meaning that 99.2 percent of the oil in the Cane Creek remains in-place. These numbers do not include all the other overlying clastic zones that also have petroleum production potential. So far, the challenges of this play have overshadowed the significant successes.”

     In September 2024, Zephyr Energy announced successful results of drilling, resulting in 2,100 barrels of oil equivalent per day with very little water production. This is after the well was acidized and with only 130 ft of reservoir completed. The well was not hydraulically fractured. In May 2025, further well results were announced.

“The well test results suggest that the chosen completion strategy (hydra-jet abrasive perforation and matrix acidization) was highly successful, and the test data results fit well with the Company’s P50 estimate of reservoir properties.  It should be noted that no fracture stimulation was performed to achieve this excellent well deliverability result. Fracture stimulation could offer further upside potential for both the well, and for the broader Paradox project development.”

“I could not be more pleased with the initial results from this latest production test,” said Colin Harrington, Zephyr's Chief Executive Officer. “Our team has worked exceptionally hard to crack the code to deliver highly economic production from this under-explored basin, and with today’s news I believe we have made huge strides forward.

“While the early results on this single well are fantastic and demonstrate commerciality, I am even more encouraged when considering the potential implications for the broader development of our Paradox project,” Harrington continued.

     The well results are summarized below and look quite favorable. If this play proves to be repeatable without hydraulic fracturing, it should be able to be produced at a favorable cost compared to other horizontal plays

 

References:

 

Paradox Basin. Wikipedia. Paradox Basin - Wikipedia

HETEROGENEOUS SHALLOW-SHELF CARBONATE BUILDUPS IN THE PARADOX BASIN, UTAH AND COLORADO: TARGETS FOR INCREASED OIL PRODUCTION AND RESERVES USING HORIZONTAL DRILLING TECHNIQUES (Contract No. DE-2600BC15128). DELIVERABLE 1.1.1 REGIONAL PARADOX FORMATION STRUCTURE AND ISOCHORE MAPS, BLANDING SUB-BASIN, UTAH. Submitted by Utah Geological Survey. December 2003. Microsoft Word - Deliverable1.1.1.doc

Utah’s Emerging Northern Paradox Basin Unconventional Oil Play. Michael Vanden Berg. Utah Geological Survey. January 4, 2021. Utah’s Emerging Northern Paradox Basin Unconventional Oil Play - Utah Geological Survey

Zephyr Energy conducts successful well production test in Paradox basin, Utah. World Oil. May 7, 2025. Zephyr Energy conducts successful well production test in Paradox basin, Utah

Zephyr Energy CEO on successful State 36-2R well production test results. Zephyr Energy. Zephyr Energy CEO on successful State 36-2R well production test results - Zephyr Energy

Geologic characterization of new Cane Creek cores from the northern part of the Paradox Basin, Utah. Elliot A. Jagniecki, Ryan D. Gall, and Michael D. Vanden Berg. Utah Geological Survey. September 15-18, 2019 – AAPG Rocky Mountain Section Meeting, Cheyenne, Wyoming. Posted: January 16, 2020. Geologic characterization of new Cane Creek cores from the northern part of the Paradox Basin, Utah

Assets: Paradox Basin. Zephyr Energy (website). Paradox Basin - Zephyr Energy