Tri-Valley Spuds Los Gatos Prospect Test Well
|Wednesday, November 24, 2004
Continuing its relentless pursuit for a big target discovery, Tri-Valley Oil & Gas Co. will finish rigging up in the huge Coaling/Kettleman producing area to begin drilling its Los Gatos Creek No. 1-16 today. The Company expects to finish drilling and log the well before year end.
Approximately 100 miles northwest of Bakersfield, California, the prospect is surrounded by fields that have produced more than two billion barrels of oil and nearly four trillion cubic fee of natural gas. The Los Gatos Creek exploratory prospect contains five potential pay zones and is two and a fourth miles northwest of an earlier test that had many oil and gas shows but had been depleted by the 600 million barrel of oil equivalent production of the nearby East Coalinga Oil Field since 1938.
Tri-Valley's geologists and engineers have mapped this new prospect area estimating a minimum target potential in the range of 75 million recoverable barrels. If all zones are fully loaded, the oil and gas in place could easily double to qualify this Los Gatos prospect as a giant oilfield.
The Company cautions that this is an exploration prospect and the statistical odds are against a new discovery. However, all data indicators for success are present and the Company is committing in excess of one million dollars just to drill the 7,200-foot test well.
Exploration opportunities in the area recently became available since ChevronTexaco began selling some of its acreage in mature areas. However, other than Tri-Valley's own testing, no well has been drilled in the area for about 50 years leaving large tracts of prospective land now open that Tri-Valley's proprietary data base, along with new technology, suggests could host targets of considerable magnitude.
F. Lynn Blystone, President and Chief Executive Officer of Tri-Valley Corporation, the publicly traded parent of Tri-Valley Oil & Gas Co. commented on the exceptional value these types of targets can provide shareholders, drilling partners and consumers.
"Our company looks for very large targets where discovery success can catapult our stock value, give extraordinary rewards to our drilling partners and increase supply for the consumers of oil and natural gas based products. When we win, everyone wins and we have enough of these big targets in our inventory to have one or more come in to exceptionally reward those who join us in the quest for big, new reserves," Blystone said.
He noted the Company had the very strong support of its programs by more than 93% of its shareholder base and all of its drilling partners and is, therefore, increasing its technical staff to ramp up the generation of prospects to accelerate the probability of major discovery success.
"We believe that only a one percent success on the aggregate potential of our TVOG Opus I Drilling Program LP would pay for all program exploration costs, all field development and operating costs, all royalties, allow for Tri-Valley's 25% back in and, at today's prices, could still return better than 12 to 1 to the investors not even counting tax benefits. While we make no guarantees, our corporate goal aims at finding 10% or more of the program's aggregate potential," Blystone said.