Solana to acquire rights to Cal Canal property
Solana Petroleum Corp SOP
Shares issued 16,546,964 Sep 8 close $0.38
Thu 9 Sept 99 News Release
Mr. James Taylor reports
The company has executed a letter agreement dated Sept. 8, 1999, with ABA
Energy Corporation of Bakersfield, Calif., whereby Solana can earn a
substantial interest in a 40-acre tract held by ABA on the Cal Canal
anticline in the San Joaquin basin in Kern county, Calif. By drilling an
exploratory well (deep test) to a specified depth within the Miocene
Temblor formation below 14,500 feet, and establishing paying production
therefrom, Solana can earn a 100-per-cent working interest and a
74.575-per-cent revenue interest before payout, and a 73.625-per-cent
working interest and 58.9-per-cent revenue interest after payout. ABA will
be operator and retains the option to take a 5-per-cent working interest in
the tract prior to any drilling.
The ABA/Solana tract is approximately 1,500 feet north of Berkley
Petroleum's Cal Canal No. 1 well, currently drilling toward the top of the
Temblor formation. Based on seismic and well evidence contained in a report
by an independent geologist/geophysist, the ABA/Solana tract appears to be
entirely within the Cal Canal Temblor structural closure.
The Temblor formation is highly productive (both oil and gas) at shallower
depths (10,000+ feet) to the southeast at Elk Hills and to the northwest of
Cal Canal at Lost Hills where Berkley, et al have encountered large scale
gas and condensate reserves at approximately 17,650 feet. Prior to
Berkley's test, no deep exploratory tests had ever been drilled at Cal
Canal, but the shallower Stevens formation produces gas and condensate from
just above a depth of 11,000 feet at Cal Canal. Under certain
circumstances, Solana will have rights to Stevens' production under its
agreement with ABA.
James B. Taylor, chairman of Solana, stated that, "The 40-acre property
acquired is underlain by potentially thick, stacked, Temblor reservoir
sands, representing an attractive opportunity for Solana as it expands its
operations into California."
Solana also holds a 38.125-per-cent interest in the Tapir Association
contract in the Llanos basin of eastern Colombia, where its first
exploratory well tested oil in the Mateguafa No. 1 earlier this year.
Appraisal drilling at Mateguafa will commence in the fourth quarter of this
year. The company recently announced the pending acquisition of up to an
additional 11.875 per cent of the Tapir contract from Seven Seas Petroleum,
which when completed, will give Solana a 50-per-cent working interest in
the contract.
The company also holds rights to earn a 50-per-cent interest in the
126,000-acre Cano Caranal Association contract, also in the Llanos basin of
Colombia, where a number of large structures are being evaluated for
possible drilling.
WARNING: The company relies upon litigation protection for
"forward-looking" statements.
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