From studies including reports by the State of California Division of Oil, Gas & Geothermal Resources, an independent engineer and Tri-Valley's own technical staff, the Company estimates more than 100 million barrels of oil in place in multiple formations for exploitation. Old, conventional recovery methods have typically recovered in the range of 25% in the heavy oil interval and new methods suggest double that or more may be achievable according to experts.
A report by the State of California indicates as much as 500 feet of pay in the Upper Vaca Tar Sand section and up to 200 feet in the lower Vaca interval. Several additional light oil formations are projected down to 8,500 feet. The Upper Vaca zone will be the primary target of the initial test well which will be drilled by the Company's own just-acquired rig number 105.
"We see this as an exceptional opportunity for our drilling partners and to add significant share value since modern recovery methods have never been applied here up to now. Experts such as Dr. Roger Butler, who have developed new recovery techniques for Canada's Athabasca Tar Sands, a similar formation, believe the Vaca can have high volume, long life wells using the new tar sand recovery technology," said Joseph R. Kandle, president of the operating subsidiary, Tri-Valley Oil & Gas Co.
While the initial well will be a vertical test, the Company could eventually drill as many as 20 dual horizontal wells to thoroughly exploit the oil in place and confirm Dr. Butler's estimate. Called SAG-D for steam assisted gravity drainage, the wells involve sets of upper and lower horizontal well bores with continuous steaming being injected into the over bore to help the heavy oil drain into the under bore for recovery. Tri-Valley has already acquired its first 25 million BTU steam generator for use on the Vaca wells.
"Pleasant Valley joins our Temblor Valley project in a drilling campaign to boost the Company's production, revenue and reportable reserves as we begin to convert these assets into income producing properties to build share value. We see this property as another source of significant upside reward for our project investors and shareholders," said F. Lynn Blystone, chief executive officer.
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