Tri-Valley receivs funds to drill deep well in San Joaquin Valley

Sep 16, 1999 02:00 AM

Tri-Valley Oil & Gas Co. has confirmed the receipt of complete funding from ten Canadian resource companies on their portions of the initial test well in Project Ekho, it was announced by F. Lynn Blystone, CEO. Estimated to cost $ 9.5 mm, the first well is programmed for 19,000 feet in the centre of the south San Joaquin Valley near Bakersfield, the headquarters of TVOG and its publicly-traded parent, Tri-Valley Corp.
The Ekho No. 1 will test a mapped structure with a target of 4 bn barrels of 42 gravity oil and 10 tcf 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 north-west flank of Project Ekho blew out 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 bn 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 mm barrels, four of which have produced more than 1 bn barrels.
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 % 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 eighteen 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 % 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.." Both companies have headquarters in Bakersfield.

Source: Business Wire
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