The Pleasant Valley No. 2 will be a vertical well to appraise several zones below the Vaca Tar Sands interval in which the Pleasant Valley No. 1 penetrated while coring the vertical section in the No. 1 well. As originally planned, the Pleasant Valley No. 1 was subsequently plugged back and a 1,520' horizontal section was successfully drilled and completed. Steaming this first well is expected to begin in September, and new oil production from it is set to begin in October. During the coring phase of the operation, encouraging evidence of light oil also showed up in the bottom cores of the No. 1 well, prompting the decision to drill vertically as deep as 8,500 feet on the second well which, if needed, could still be converted to a horizontal bore in the Vaca formation.
Owing to decades of low oil prices, until recently, the area has been under-explored and Tri-Valley's technical team is very enthused about the Pleasant Valley prospects in its Opus I exploration/development program. Today's higher oil prices readily accommodate the extra cost of horizontal drilling and steaming required to recover extra heavy oil.
"The hundreds of feet of core from Pleasant Valley No. 1 has the highest oil saturation I've ever seen in my 42+ year career. It calculates as high as 85% oil saturation," said Joseph R. Kandle, president of the operating subsidiary, Tri-Valley Oil & Gas Co.
"Building on the 25-year conventional Vaca Tar Sand development by surrounding operators and other industry analog heavy oil/thermal recovery projects, Tri-Valley is introducing horizontal drilling and advanced steaming techniques to enhance recovery in that zone. These practices should improve capital efficiency and development economies through reduced well counts, life of well costs and production per well to increase the reward to Tri-Valley shareholders, drilling partners and royalty owners over conventional methods previously used in the Oxnard Oilfield," said Robert Bell, Vice President of Operations for Tri-Valley Oil & Gas Co, the project operator.
While the main development target is the Vaca Tar Sands where modern heavy oil recovery techniques are being implemented by Tri-Valley, the Company is highly confident that deeper zones contain producible quantities of light gravity sweet oil as the Oxnard Field has already produced 25,000,000 barrels of light, sweet crude, offering the potential of parallel development of other zones along with the heavy oil program.
"Tri-Valley is accelerating development of its properties on all fronts to build production, revenue, reportable reserves and share value. We have water flood and steam operations underway in two separate zones at our Temblor Valley West property, adjoining the billion-barrel South Belridge Oilfield, 40 miles west of our Bakersfield, California, headquarters. We're drilling new wells at Pleasant Valley and will soon start drilling at the Moffat Ranch East gas field, 120 miles north of Bakersfield," said F. Lynn Blystone, Chairman and Chief Executive Officer.
James Bush, Vice President of Exploration for Tri-Valley Oil & Gas Co., noted that, in addition to the lower risk, conventional development wells, the Company is resuming very large target exploration activity where discovery success can create exponential gain in value. Bush is also coordinating the joint research program with a worldwide scientific organization to achieve commercial flow rates from Tri-Valley's two exceptionally large discoveries, the EKHO and the Sunrise gas projects, where the oil and gas are locked up in tight formations.
"We will be generating plays from new concepts and non-traditional thinking in exploration never before applied in the San Joaquin Valley, which still has many horizons that are under-explored. These high-risk, high-value exploration targets can rapidly transform a company and the goal of our technical team is to harness new technology to generate and drill these opportunities," Bush said.
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 1972. Tri-Valley Corporation stock is publicly traded on the American Stock Exchange under the symbol "TIV."
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