Tri-Valley Successfully Tests Big Ekho Deep Well

Tri-Valley confirmed that a diagnostic hydraulic fracture process on its Ekho deep well in California indicated a successful breakdown of the Vedder Sand formation at the 18,000-18,500 foot level and provided important information for designing the main "frac" job to be done on the well.

Drilled in 2000, the well found huge amounts of extremely high quality oil and gas in place but locked in very tight formations. After searching the world for an analog, Tri-Valley realized it would have to pioneer the completion treatment necessary to extract the oil and gas at commercial rates. A key point of information is whether or not the formation can be broken within the limitations of the casing strength and the diagnostic frac showed that it can be done.

"We have not only looked around the world for wells of comparable high pressure, high temperature and formation characteristics, we've spoken with many worldwide frac experts to find an already tried and true program and concluded that we would have to design it ourselves. The diagnostic frac results support our present ideas and we are preparing for a full test," said Joseph R. Kandle, president of Tri-Valley Oil & Gas Co., the operating subsidiary.

With an independently estimated 133 million barrels of oil and 162 billion cubic feet of associated natural gas in place in the 320-acre unit, Tri-Valley believes the prize is well worth the pursuit even though its economics are based on a very conservative 12.5% recovery factor. Of course, there are no guarantees that even that recovery could be achieved but it is also possible that ultimate recovery could be significantly higher.

"Tri-Valley looks for bonanza-type targets not only to provide exceptional reward for its drilling partners and shareholders, but also to make a meaningful contribution to consumer demand. California is the world's fifth largest economy and increasingly imports oil and gas and needs really big discoveries to make a difference -- the kind Tri-Valley pursues," said F. Lynn Blystone, president and chief executive officer.