Tri-Valley Begins Work on Giant Sunrise Natural Gas Project

Tri-Valley Oil & Gas has commenced operations continuing its effort to unlock an indicated huge amount of dry natural gas in the tight McClure Shale formation near Delano, California. Tri-Valley will move in a production rig Monday to prepare the Sunrise-Mayel 2HR for a redrill of the horizontal leg and a subsequent hydraulic fracturing of the gas-bearing formation penetrated by the horizontal bore. An earlier attempt to hydraulically fracture the formation along a three thousand-foot horizontal leg of the borehole failed due to mechanical reasons when the well casing ruptured above the gas-bearing formation and the frac energy went into a barren zone leaving the geological promise still untested.

Readings from initial wells drilled have confirmed the presence of good porosity with high saturation of dry gas although the formation permeability is low and requires fracturing to create enough pathways for the gas to exit at commercial rates. The Company has mapped an area of closure of approximately 6,600 acres and log interpretations estimate approximately 300 feet of pay that may hold in the range of 80 billion cubic feet of gas per 160 acres.

"This discovery has the potential to rival the huge Barnette Shale play in Texas. We're following the example of Mitchell Energy which persisted repeatedly over the years to unlock the energy treasure of the Barnette which averages only 4% to 6% porosity. The McClure is a much better source rock with 40% porosity and the potential upside could add enormous value to the Company. Very few companies ever have a potential three trillion cubic foot in place gas field to work on so you can imagine our enthusiasm for this project," said Joseph R. Kandle, president of Tri-Valley Oil & Gas Co.

The McClure Shale of the south San Joaquin Valley of California has long been known to host hydrocarbons, but, until recently, no one had been able to exploit it at commercial rates. Lately, Texaco, now ChevronTexaco, EOG Resources and Occidental Oil and Gas have produced McClure wells with horizontal drilling and hydraulic fracturing at commercial rates in the deeper oil phase and Tri-Valley believes it can achieve commercial success in the shallower gas section around Delano.

"In our search for big upside for shareholder growth, we have our eye on local history when a 1962 discovery of the Lathrop Gas Field in California launched a then tiny Occidental Petroleum into a world-class company. We estimate the Sunrise Natural Gas Project to potentially be nine times larger than Lathrop. Hence, our dedication to cracking the code, so to speak to extract this gas and reap the benefit for our shareholders and drilling partners. This would be a great benefit to consumers as well," said F. Lynn Blystone, president and chief executive officer of Tri-Valley Corporation the publicly traded parent of Tri-Valley Oil & Gas Co.
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