Ivanhoe Energy to conduct survey in San Joaquin basin
Ivanhoe Energy Inc IE
Shares issued 89,727,767 Oct 1 close $3.60
Mon 4 Oct 99 News Release
Mr. David Martin reports
Ivanhoe has teamed up with Prime-X Oil & Gas LLC, of Houston, Tex., to
conduct the largest, state-of-the-art, 3-D seismic survey ever undertaken
in the southern San Joaquin basin, in Kern County, Calif., as part of
Ivanhoe's program to identify new oil and gas prospects in the region.
The survey will target untapped deep zones, from 8,000 to 20,000 feet, as
well as covering shallower exploration targets, over a total of 126 square
miles, or approximately 80,000 acres.
Ivanhoe Energy and Prime-X have secured leases, lease options or permits
covering 85 per cent of the total area to be surveyed. Ivanhoe's average
working interest in these leases is 42 per cent. The leases acquired under
Ivanhoe's contract with Prime-X will increase Ivanhoe's land position in
the San Joaquin basin by more than 50,000 acres, to a total in excess of
130,000 acres. Much of the land position is held under agreements with
Ivanhoe's partner, a major oil producer in California. Ivanhoe is not in a
position at this time to disclose the precise co-ordinates of the area
slated for the seismic survey because of continuing leasing activities and
related business considerations.
Ivanhoe Energy and Prime-X have signed a contract with Grant Geophysical
Corp., of Houston, Tex., to acquire the seismic survey. Preliminary work is
now under way and actual recording of data is expected to start in early
November.
David Martin said he expects that Ivanhoe and Prime-X will complete their
selection of prospects and will be ready for drilling by the middle of next
year. "Although we will be working in an area that has proven oil and gas
fields, very little seismic information is available on the lands within
our survey area and very few modern exploration wells have been drilled. We
expect to map a number of plays from the 3-D seismic data, some of which
may be analogous to the recent Bellevue gas discovery east of Lost Hills,
and some of which will target shallower oil objectives."
The survey will use a very intense, high-density acquisition technique
normally reserved for small, structurally complex geological environments,
such as salt domes. Data across the extent of the project will be recorded
using a subsurface sample of 55 feet by 55 feet to produce a
high-resolution image of the subsurface geology. The total cost of the
survey, including leasing costs, will be approximately $7.5-million (U.S.),
which will be shared on a 50/50 basis by Ivanhoe and Prime-X.
Prime-X is a wholly owned subsidiary of independent producer Prime Natural
Resources Inc., of Houston, Tex., and conducts all of Prime Natural
Resources' operations in California. Prime-X started leasing activity in
the San Joaquin basin in 1997 and began planning a seismic program a year
before a Canadian consortium, led by Berkley Petroleum, drilled the
Bellevue deep gas blowout well last November that triggered a new wave of
exploration interest.
California's San Joaquin basin hosts some of the largest oil fields in the
lower 48 states. It has been a major oil producing region for 100 years,
primarily from shallower depths of less than 5,000 feet, and has recorded
total discovered reserves of more than 12 billion barrels of oil.
Ivanhoe Energy expects to be in a position to make further announcements
about its developing interests in the San Joaquin Valley shortly. The
company has previously announced an expanded interest in an early
exploration program to evaluate the deep gas potential of its East Lost
Hills properties, the acquisition of a portfolio of royalty interests in
the valley and its participation in the Lucky Dog No. 1 exploration well to
be drilled later this year.
WARNING: The company relies upon litigation protection for
"forward-looking" statements.
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com
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