News copied from TRIL thread....
By CHIP POWER
Californian staff writer
e-mail: ppower@bakersfield.com
An investment group attempting to develop deep-reservoir natural gas reserves has hit
some mechanical snags that are delaying the much-watched project, a member of the
group said Monday.
However, that delay doesn't seem to have diminished any enthusiasm for the risky but
potentially lucrative exploration.
"The learning curve on something like this is very steep," said Andy Calerich, chief
financial officer for PYR Energy Corp., of Denver. The company is one of a half-dozen
partners with Berkley Petroleum, an Alberta, Canada-based company that has a lead
role in probing whether depths of more than three miles may yield prodigious amounts of
natural gas in Kern County.
The Berkley project is one of the most closely watched, since it got a head start on
competitors on drilling wells up to 17,000 feet. The project is hoped to confirm whether
a massive natural gas blowout a year ago from deep underground will be of long-term
economic significance.
Calerich said it is possible that the consortium may need to redrill its pioneering well,
Bellevue No.1R, which would be expensive. The deep wells can cost $10 million,
although redrills are substantially less. But while redrilling is an option, he said that the
group was hopeful that would be unnecessary. The snags developed when debris entered
the well, he added, sealing off the flow.
Meanwhile, another exploration group announced Monday an expansion of its plans to
seek oil and natural gas reserves. Tri-Valley Oil & Gas Co., a unit of publicly traded
Tri-Valley Corp., said it added more than five square miles of mineral interest ? or, legal
rights to underground natural resources ? for its deep well exploration called Project
Ekho.
The company plans to begin setting up a drilling rig on Monday near east Lost Hills, with
plans to penetrate 19,000 feet at the site of North America's deepest onshore producing
well, Tri-Valley president and chief executive officer F. Lynn Blystone said Monday.
Though the venture is inherently high risk, Blystone said that company executives have
first-hand knowledge of deep drilling in the region. In a statement, the company said it
had "newly processed" well log data that represented an "astonishing opportunity" for
Tri-Valley and its nine Canadian partners.
Blystone said that data was a re-interpretation of existing drilling data rather than
information from a new well.
He said he was not surprised that the Berkley group has hit delays, noting that the high
pressures that exist deep below the earth make drilling there vexing. "When you have a
lot of pressure, it's always going to be coughing something back up."
The groups are targeting gas pools that could be massive in size, though three miles
down. That depth puts it well below the oil-producing level, and companies have been
sinking large amounts of equity into their projects.
Tri-Valley has a market capitalization of about $37.6 million; its thinly traded stock has
increased 293.8 percent year-to-date, according to its financial reports. |
