Tri-Valley Funded to Begin Deep Test Well
Business Editors/Energy Writers
BAKERSFIELD, Calif.--(BUSINESS WIRE)--Sept. 16, 1999--Tri-Valley
Oil & Gas Co. has confirmed the receipt of complete funding from 10
Canadian resource companies on their portions of the initial test well
in Project Ekho, it was announced Thursday by F. Lynn Blystone, chief
executive officer.
Estimated to cost US$9.5 million, the first well is programmed
for 19,000 feet in the center of the south San Joaquin Valley near
Bakersfield, the headquarters of TVOG and its publicly-traded parent,
Tri-Valley Corp. (OTC BB:TRIL).
The Ekho No. 1 will test a mapped structure with a target of four
billion barrels of 42 gravity oil and 10 trillion cubic feet of high
Btu natural gas in place in the primary objectives alone. Secondary
objectives could double that.
The area has emerged as North America's hottest and biggest
onshore oil and gas play ever since a well being drilled by another
consortium on the northwest flank of Project Ekho blew out last
November at Middle East rates.
For more than 100 years, the San Joaquin Valley has been a
prodigious contributor to the nation's petroleum demand. Its more than
11.5 billion barrels of shallower zone production exceeds that of
Alaska's Prudhoe Bay and Kuparak River fields combined.
The Bakersfield area is home to 22 giant fields which have
produced more than 100 million barrels, four of which have produced
more than 1 billion barrels. Today, the top three producing fields in
the lower 48 states are in the south San Joaquin Valley and the area
production is nearly three times as much per day as the entire state
of Oklahoma.
While more than 100,000 wells have been drilled in Kern County,
which is the main producing area, fewer than 70 wells have penetrated
below 15,000 feet and only 10 percent of those were on any meaningful
structures.
"This is an exciting new frontier to usher in the second century
of the second millennium for the Bakersfield petroleum industry," said
Joseph R. Kandle, TVOG president, who has supervised several deep
California wells.
Blystone, who is also CEO of the public parent, lauded the
consortium for its foresight and timing as oil prices are firming due
to increased demand and OPEC disciplines its production.
"The world is using oil at nearly four times its replacement rate
and the U.S. is doing about the same. The ruthless consolidation of
the industry, which has continued unabated for the last 18 years, is
not finding new supplies quickly enough. This affords exceptional
exploration opportunity for Tri-Valley, its partners and
shareholders," Blystone said.
"After all, California is the world's seventh-largest economy and
a premium energy market. Discovery of large, high quality new reserves
will confer an exponential gain in value for Tri-Valley and its
partners," he noted.
TVOG will be carried on the drilling and completion costs of the
first three wells and back in for a 25 percent working interest after
payout on a well-by-well basis. TVOG expects to commence operations on
Ekho No. 1 this quarter.
TVOG is the wholly-owned subsidiary of Tri-Valley Corp., which is
publicly-traded over the counter on the electronic bulletin board
under the symbol "TRIL." Both companies have headquarters in
Bakersfield, and share the Web site www.tri-valleycorp.com.
This news release contains forward-looking statements that
involve risks and uncertainties. Actual results, events and
performance could vary materially from those contemplated by these
forward-looking statements. Among the factors that could cause actual
results, events and performance to differ materially are risks and
uncertainties discussed in the company's quarterly report on Form
10-QSB for the quarter ended June 30, 1999, and the annual report on
Form 10-KSB for the year ended Dec. 31, 1998.
--30--mra/la* kwp/la
CONTACT: Tri-Valley Oil & Gas Co., Bakersfield
F. Lynn Blystone/J.R. Kandle, 661/837-9300
661/837-9309 fax
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