Tri-Valley Corporation is ahead of schedule with regard to its first quarter 2008 "Operation Catapult" oil & gas goals. The Company is in the process today of returning its Pleasant Valley No. 1 horizontal well to production after completing its second steam cycle as part of its major heavy tar sand development campaign on its Pleasant Valley Property at the Oxnard Oil Field located in Oxnard, CA.
"As a result of this second steam cycle, even more heat has been introduced into the reservoir, and we are anticipating an even higher daily production rate as well as a significantly longer production cycle. This will further serve to increase our daily revenues and cash flows, which subsequently will translate into higher returns to our Opus-1 investors and increased value to Tri-Valley shares," said Egan Gost, Investor and Public Relations Director.
Based on the test production of the Pleasant Valley No. 1 well, Tri-Valley now estimates that its horizontal wells in the Upper Vaca Tar Sands will individually deliver in the range of 250 barrels of oil per day (BOPD) while on pump after each steam cycle. The Company expects to drill at least two more horizontal Upper Vaca wells by the middle of April, with an estimated goal of 20 such wells by the end of 2008. At that time, Tri-Valley will consider putting in the infrastructure for continuous steaming through injector wells, an approach estimated to potentially double the production rates of the producing well bores.
"Having announced a goal of drilling three new horizontal wells and steaming one new well at Pleasant Valley during the first quarter of 2008, we are pleased that our operations team has just completed drilling the fifth horizontal well and we are steaming two other new horizontal wells that are to be put on production. This puts us ahead of schedule, and well on our way to our initial Operation Catapult production goal of 1,000 BOPD by the end of the second quarter ending June 30, 2008," said Robert Bell, Vice-President of Operations for Tri-Valley Oil & Gas Co., the Company's operating subsidiary.
Additionally, Tri-Valley uses light gravity oil as diluent to thin the heavy tar sand oil produced at Pleasant Valley to meet sales specifications and to receive higher prices for its oil. The Company is currently in the process of finalizing a diluent contract with an outside supplier.
"Securing a long-term diluent/light oil source at an economically viable cost will enhance our ongoing operations and help reduce Tri-Valley's lifting costs at Pleasant Valley, thus making the entire operation more profitable," said Joe Kandle, President of Tri-Valley Oil & Gas Co.
Tri-Valley recently hooked up its newly drilled Moffat Ranch East 48x-7 natural gas well and began continuous gas sales this past Monday. The well was put on at an initial delivery rate of one million cubic feet per day, and that rate will be gradually increased to an optimum rate as determined by pressure draw down and any other technical factors. Tri-Valley is also ahead of schedule on its single re-entry well and two workover wells at Moffat Ranch, which are expected to produce additional gas from that property.
"We are on track to meet our second quarter 2008 goal of two million cubic feet of gas per day by the end of June," said Jim Bush, Vice-President of Exploration for Tri-Valley Oil & Gas Co.
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