Tri-Valley Drills Through 375 Feet of Oil Saturated Diatomite Formation
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Market Wire
2:21 p.m. 09/07/2006
BAKERSFIELD, CA, Sep 07, 2006 (MARKET WIRE via COMTEX) -- In what it terms a major boost in the already generous upside potential for re-exploitation of its Temblor Valley West oil property, Tri-Valley Corporation (TIV) announced it had drilled through 375 feet of oil saturated upper Diatomite formation in its Lundin-Weber D-350-30 well.
The company encountered the hydrocarbon zone from 700 feet through 1,075 feet and notes that offset wells in adjoining leases have been completed and produced in the Diatomite as deep as 4,000 feet.
"We originally modeled our target for 200 feet of net pay in the Diatomite to estimate 300 million barrels of oil in place in the zone for some percentage of recovery which, with modern methods, could exceed 10 percent. To find this much oilshows this early definitely expands our expectations for the field," said F. Lynn Blystone, president and chief executive officer.
Tri-Valley took over the lightly drilled (49 wells on 700 acres) property the first of this year and assembled its own production and drilling rig fleet for a drilling campaign to increase production. So far the well mud log shows have met or substantially exceed the targeted zones expectations.
Located on the west flank adjoining the massive South Belridge Oilfield Producing Complex 40 miles west of Bakersfield, California, Tri-Valley's property is favorably positioned high to the main structure and has been producing modestly exclusively from the shallow Etchegoin Sand for some 80 years and no production from either the Tulare or Diatomite formations has ever occurred. Some years ago, an adjoining 280 acre property produced in excess of 8,000 barrels a day from several hundred wells for several years predominantly from the Diatomite formation leading the Company to drill to confirm an extension of the formation on its own lease.
While the contained oil is in the desirable range of 26 to 28 gravity, and does not require steaming to recover, the Diatomite formation itself does require hydraulic fracturing to maximize recovery, a process that came late in the development of surrounding fields producing over the past 95 years.
"We're on the flank of a billion plus barrel oilfield and the major companies operating the field are shooting 3-D seismic over the larger region including our property to further define the potential. We also see deeper opportunity which we will investigate in due course while we ramp up production on this lease," said Joseph R. Kandle, president of the subsidiaries, Tri-Valley Oil & Gas Co., which operates the field and Great Valley Production Services LLC which is drilling the development well.
Tri-Valley has other producible properties with prospective zones for which it acquired its fleet of rigs to re-exploit and will begin deploying rigs later this year to drill these new zones. Development funding for three of these properties, including Temblor Valley, comes from the TVOG Opus I Drilling Program LP of which Tri-Valley Corporation is the managing partner and 25% working interest owner. Other properties are held 100 percent for Tri-Valley's account.
"We expect these properties to secure multiple high returns for our partners and add superior value to our shares as we increase production, revenue and reportable reserves. Until we achieve sustained production, we cannot classify these resources as proven reserves at this stage, but standard industry formulae for evaluating field potential in the industry augers well for our partners and shareholders in this regard," Blystone said. |
