Solimar Snags 12% Interest in Aliso Canyon Prospect

Solimar Energy Limited has acquired a 12% working interest in an exciting new exploration prospect, in the Aliso Canyon field, which is located in the Santa Susana Mountains just north of the San Fernando Valley in the
Los Angeles County, California.

Solimar Energy was offered a combined 20% interest in the prospect by the two US partners which included an up front payment, some well conversion costs to prepare for the redrill and a promoted portion of the cost to do a 2,500 feet directional redrill.

Separately, Solimar Energy has also entered into an agreement with Sunset Energy Limited, its partner at the Maricopa Project, covering the Aliso Canyon prospect. The new agreement has Sunset Energy taking an 8% working interest in the project and paying a share of the cost to earn their working interest. This will leave Solimar Energy with a 12% working interest in the prospect.

The Aliso Canyon prospect is estimated by Solimar Energy's Geologic Consultant, Dale Kunitomi, to have potential P50 recoverable resources of approximately 3 million barrels of oil on the 1,200 acre position acquired.

Work has already begun by the project partner providing the existing well bore. The existing well has been recently used as an injection well for gas storage in the adjacent fault block. The partner who owns the existing well bore has already begun preparing the well for re-entry. The plan is to directionally drill 2,500 feet of new hole to a proposed bottom hole location 9,500 feet deep that will evaluate the primary objectives involving the Sesnon and Frew Sands which are estimated to be on the up thrown side on an un-drilled fault block where there may be approximately a 300+ feet thick section high to the oil water contact in the adjacent fault block.

Total dry hole costs for this well are estimated at US $1 million, with a successfully completed well expected to cost approximately US $1.5 million. In the success case, Solimar Energy, and its partners in the project, will have access to existing oil facilities and gas pipeline without having to participate in the construction of separate facilities. Trio Petroleum will be the operator of the new drilling operations. A US Utility Company will do the preparation of the existing well bore and, in the success case, operate the well while producing into their production facilities.

Background to the Aliso Canyon Field Prospect

The Aliso Canyon oilfield was discovered by Tidewater Associated Oil Company in 1938. Cumulative production at Aliso Canyon oilfield exceeds 60 million barrels of oil and 180 million cubic feet of gas. The field is currently operated by Southern California Gas Company as one of the ten largest gas storage fields in the United States.

The Aliso Canyon structure is primarily a southeast-dipping nose with Pliocene oil zones trapped up dip to the north by the Santa Susana fault and to the west by the Frew fault. The deeper Miocene and Eocene productive oil sands are trapped up dip by the south dipping Ward reserve fault in the centre of the field. These deeper sands, known as the Seson and Frew sands are the primary gas storage zones in the main Aliso Canyon field.

Partners in the Aliso Canyon Prospect (and their respective working interests) are:

  • US Utility Company (Operator): 50.0%
  • Trio Petroleum: 25.0%
  • Solimar Energy Limited (ASX Code: SGY): 12.0%
  • Sunset Energy Limited (ASX Code: SEY): 8.0%
  • Other Partners: 5.0%
     
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