Bakerfield Californian Thursday Nov 24th:
The syndicate manager was interviewed and an article ran in today's paper. Good timing as the syndicate is running a booth at the Western Investment Conference in San Francisco this weekend. No mention of the shallow well (Midway 13-1), Thay are already down 700' after establishing connecting pipe yesterday. Olympic seems to be moving along, and if they hit at Midway, they won't be trading at this level.
bakersfield.com
TEXT:
Blowout region drawing interest
Filed: 11/24/99
By CHIP POWER
Californian staff writer
e-mail: ppower@bakersfield.com
Another investor group has entered the natural-gas sweepstakes in the Lost Hills area of Kern County, where companies believe new wells sunk three miles down will mean substantial profits.
Despite some encouraging signs that a new gas discovery could invigorate the region, such well ventures still represent "substantial risks" as well as rewards, said Dave Clark, a permit manager with the state of California.
The newest entry in the natural-gas play comes from a group called the Semitropic Syndicate, which said it has developed a 100 percent working interest in 4,500 acres of oil- and gas-leased lands near an earlier Lost Hills discovery.
That's about nine square miles of flat, arid countryside about an hour northwest of Bakersfield. The syndicate said it represents one of the largest contiguous blocks of available land in the San Joaquin Valley near Lost Hills.
The group said it plans to do exploratory drilling about three miles from the Lost Hills well, which had a spectacular, fiery blowout last November.
Calgary-based Berkley Petroleum Corp. is currently testing that site after drilling a replacement well.
Though prices for crude oil from Kern County have risen more than 300 percent this year, earlier single-digit prices trimmed the total number of drilling permits in the region in 1999 by more than 50 percent, said Clark.
However, the November 1998 blowout, in an area not known for massive quantities of natural gas, has prompted at least five companies and investment groups to make plans to tap into whatever gas may be there, said Clark. One group, led by Bakersfield-based Tri-Valley Corp., said this week that it planned to begin setting up its own deep-well rig the first week of December.
The area where they are drilling is a new frontier ? deep, sedimentary deposits near or beneath well-known oil fields. Drilling deep in the area has been a no-man's land: Although more than 100,000 wells have been drilled in the San Joaquin Basin, only 70 have been tested below 15,000 feet, statistics show.
The Semitropic Syndicate is managed by Arizona-based Olympic Resources Inc. The group has invested $1 million in the California project to date after being formed last December in the aftermath of the attention-getting blowout, said Olympic President Daryl Pollock.
"We feel that this is going to be a good deep-well project," Pollock said in an interview Wednesday. "We are going to take a more conservative approach" and develop the business plan as information develops, he said.
The syndicate believes that odds are in its favor. It said that recent drilling information in the region "suggests that most, if not all, structures in the deeper part of the basin are filled with hydrocarbons."
Meantime, the syndicate this week said it signed a joint-operating agreement with Production Specialties Co. of Bakersfield, a natural gas production company.
Though it's a high-risk venture, principals believe that the $10 million price tag of sinking a deep well would pay rich rewards if the gas fields prove to be super-sized and of global significance.
Many of the thinly traded public companies are subject to reporting rules that require them to make declarations on material events that affect the value of the company. Thus, the companies are giving increasingly frequent updates on progress or lack thereof. Larger companies or private concerns are not subject to the same securities reporting rules.
Other members of the syndicate, all of which trade on Canadian stock exchanges, are: Dasher Energy Corp.; Sur American Gold Corp.; Goldwater Resources Inc.; Clifton Star Resources Inc.; Herriman Oil & Gas Inc.; ITL Capital Corp.; Braiden Resources Ltd. and Rocraven Resources Ltd.
|
