Solimar Tests Gas from Shallow Zone at SELH Project

Southeast Lost Hills Gas Project
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Solimar announced that after reentering the 3-13 well and perforating a gas reservoir predicted from a review of the historic well data matched to seismic, initial commercial scale flows of gas have been achieved.

This is the second successful re entry and gas test from older wells in the area conducted by Solimar in the past 2 weeks on the Company's 100% owned Southeast Lost Hills gas project (SELH). The gas zone was perforated between 2215 feet and 2225 feet and is the extension of the zone discovered in the 2-13 well located approximately 1 km away.

Following initial testing at rates up to 175 mcfd an extended production test will be carried out with gas production levels maintained at a relatively low level (for example 100mcfd) in an attempt to avoid drawing fines material from the reservoir into the well bore and production equipment. The migration of fines is believed to be the cause of an at least temporary loss of production from the newly discovered zone in the 2-13 well. This well has been shut in pending a review of well completion techniques and while additional production information is captured by producing the zone in the 3-13 well. Both these wells were drilled some years ago and not optimally completed for production from this relatively shallow zone.

Solimar believes that careful management of the fine grained Pliocene gas reservoirs in terms of drilling, well completion and production techniques will be critical to the overall success of the SELH project.

Solimar is targeting a recoverable gas resource of 40 Bcf in SELH with upside for over 100 Bcf and will soon be drilling its first operated well on the project, the Almond Grove 4-13. Learnings from the gas tests in the older wells will be incorporated into the planning of the new well. One very positive aspect of the second successful gas test is that it now provides conclusive evidence that anomalous, high amplitude zones on the seismic data covering the project area denote the presence of gas charged sands. This should mean in the future that with enhanced seismic coverage the distribution of gas reservoirs throughout the trap area can be mapped accurately and future wells located to intersect gas reservoirs with a high degree of success.

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