The first letter of intent is with Vision Exploration LLC whereby California Oil & Gas can participate to a 40% interest in a prospect on the crest of a large, intensively faulted and fractured anticline in the middle of a prolific Fractured Lower Chalk trend in southern Louisiana. The targets exist below an older field that has produced 28 million barrels of oil from Tertiary formations. Both the over pressured Fractured Lower Chalk and the underlying Lower Tuscaloosa Massive Sand formations have been tested on the structure and proved to be hydrocarbon bearing, but at the time they were drilled (to depths of 13,000 to 16,000 feet), modern completion techniques were not available and those that were employed were not successful in putting these wells into production.
After completion of a formal agreement, planned activities on this prospect with Vision Exploration will involve acquiring a "state of the art" 3-D seismic survey of up to 35 square miles over the structure, followed by the re-drilling of a well drilled in 1982 which encountered what appear to be significant gas volumes in the Lower Tuscaloosa Massive Sand zone, but suffered mechanical failure and was abandoned after testing gas. Gas and condensate were also open hole drilllstem tested from the Fractured Lower Chalk in a crestal deep well over 40 years ago, but were never produced. Secondary targets include multiple Tertiary oil sands productive on the structure, within which additional reserves may be identified by the 3-D seismic in the form of previously unidentified, undrained fault traps.
The second letter of intent is an agreement with Daybreak Oil & Gas Ltd. whereby California Oil & Gas can participate to a 15% working interest in a well to be drilled by year end to test sands at the 10,000-11,000 ft level in a prospect in St. Landry Parish, Louisiana. The target location is defined by geology and 3-D seismic to be at the crest of a prolific, unexploited formation in a unitized field of over 4500 acres. This unitized field has produced over 1 TCFE of natural gas and natural gas liquids to date. Upon signature of formal binding agreements, which is expected to take place before June 30, 2006, California Oil & Gas will be part of a joint venture group that intends to drill the target location at the earliest, practical opportunity. The joint venture group intends to drill the well directionally to target over 20 BCF of marketable gas and over 750,000 barrels of condensate from an existing surface location which has installed separation facilities and a pipeline tie-in.
Other potential exists in this project as the joint venture partners have farmed in on the entire Unit. After an evaluation of the results from the first well, the group will evaluate other potential drilling opportunities, both shallower and deeper.
California Oil and Gas Corporation is a publicly traded Oil and Gas Company with Assets in the San Joaquin Basin of California. The Company is focused on exploring High Yield Oil and Gas Prospects both Domestically and Internationally. The Company is targeting the acquisition of late stage exploration or early stage development projects around the globe. As the Company grows High Impact exploration plays will be added to accelerate growth.
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