Black Rock will pay the cost of the acquisition of a 3D seismic program, shot in the last few weeks, and plans to drill three wells over the remainder of 2005 to test 3 separate plays; two oil and one gas.
One of the oil plays will be tested via a well drilled up-dip from production and is estimated to contain 1 million bbls of probable reserves. The gas prospect will test relatively shallow seismic amplitude anomalies that will be further delineated by a new 3D seismic survey.
The upside in the program is an oil play that can be considered a bypassed pay from deeper production. Wells have been drilled through the target reservoir to tap deeper production excluded from the farm-in agreement. The nearby North Shafter oil field, an analogue to this target reservoir, currently produces over 2,500 barrels of oil per day.
"This project again meets our strategic criteria of near-producing assets in proven hydrocarbon provinces," commented Ivan Burgess, Managing Director of Black Rock Oil and Gas.
"The Miocene Monterey Formation of the San Joaquin Basin is a prolific source rock and the bypassed pay inherently is a lower-risk prospect. If this year's drilling program is successful, we will evaluate a longer term, multi-year development program."
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