The four such previous wells recently drilled by Tri-Valley have shown all the three main oil-producing formations extending nearly one kilometer, or more than a half mile, further west of the original mapped boundary, potentially adding millions of barrels of newly discovered oil in place on Tri-Valley's leasehold.
If this fifth well also encounters hydrocarbon bearing zones, as the previously drilled four wells have, it will extend the boundary yet another half a mile. Even after nearly 100 years of oil production from the Tulare, Etchegoin and Diatomite formations at the shallow depths of between 450 feet and 2,500 feet, the South Belridge Oilfield is still the nation's third highest producing oilfield outside of Alaska and Tri-Valley may provide a meaningful addition once it develops its 700-acre leasehold.
Tri-Valley is now water-flooding the Etchegoin zone and steam-flooding the Diatomite section. The Company is projecting an additional 2.5 to 4 million recoverable barrels of oil in the Etchegoin zone from its current water-flood program which is now underway. Based on actual production of the Diatomite zone on neighboring properties, Tri-Valley speculates it could potentially recover in the range of 32 million barrels of oil from that section on its property.
The current well is being drilled by Tri-Valley subsidiary, Great Valley Production Services, LLC, and is using its newly refurbished rig number 105, one of California's largest production rigs which is now reconfigured to also drill to the depth of up to 8,000 feet. GVPS has two additional rigs being refurbished to bring the total rigs in its fleet to five production and drilling rigs. Tri-Valley also has another subsidiary, Great Valley Drilling Company, LLC which owns a 10,000-foot drilling rig in Nevada which is being contracted to other operators for drilling either petroleum or geothermal wells.
The steaming in the Diatomite zone of Tri-Valley's first test well is underway with the Company's own steam generator, soon to be followed by larger capacity models now being refurbished by GVPS to meet California air quality specifications. Ultimately, all five test wells will be subjected to cyclic steaming and the data used to design a comprehensive program for the entire leasehold.
"Tri-Valley has overcome numerous obstacles and delays to implement its exploitation of Temblor Valley West to build production, revenue, reportable reserves and share value. Now that Temblor development is under way, Tri-Valley will also begin drilling on its Pleasant Valley lease hold in the Oxnard Oilfield to further accelerate production build up," said F. Lynn Blystone, president and chief executive officer.
The company has been in business as a successful operating company since 1963, and has been a full reporting 12 (g) publicly traded Delaware Corporation since 1973.
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