Solimar Energy Limited announced that the Nesbit #5 exploration well has encountered approximately 800 feet of potentially oil bearing section in the Saugus Formation. The net hydrocarbon column is approximately 280 feet.
The Nesbitt #5 well at the Silverthread Project in the Ventura Basin, California reached the target depth of 7,134 feet on May 31, 2008. Wireline logs have now been obtained across the Saugus Sandstone reservoir at around 3,200 to 4,000 feet (measured depth) and the Upper and Lower Mohnian Sandstone (Monterey Formation) reservoir at around 7,000 feet. Wireline logging results and initial core examination indicate the Saugus Formation is hydrocarbon bearing and the Upper and Lower Mohnian Sandstones are non-hydrocarbon bearing. The Saugus Formation is recognised as an oil producing sandstone in the immediate area of the Silverthread Project.
Forward operations will involve casing and completing the upper section of the well across the Saugus Formation where the discovery has been made and performing production testing operations. These operations are expected to occur by the end of June 2008.
As a result of the discovery, both Solimar Energy and Sunset Energy have agreed with the Operator, Mirada Petroleum, to expand the acreage position into the adjoining lease, with a depth limitation down through the Saugus Formation. In exchange for an interest in a further 200 acres, Solimar Energy will slightly reduce its equity position from 20% to 18.5% over the new acreage position. Solimar Energy retains its 20% interest in the original Nesbitt lease. Subsequent drilling on either lease will be on a working interest basis with no further promote paid beyond the current well.
The Chairman of Solimar Energy, Mr Frank Petruzzelli, said "Based on our preliminary assessment to date, it appears that the Nesbit #5 well contains a substantial oil column. However we are still in the process of evaluating data and conducting production testing operations. Until such time as these operations are completed it is difficult to ascertain the commercial significance of this discovery with any degree of certainty. We are also pleased that we have been able to expand our acreage position in the Silverthread area via the acquisition of an adjoining lease, where we believe the potential discovery may extend into this lease area."
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