Tri-Valley Completes Acquisition of Proved Undeveloped Recoverable Oil
In a major step forward in its 2005 business plan, Tri-Valley Corporation has successfully closed on the acquisition of Pleasant Valley Energy Corporation whose sole assets are California oil and gas leases which have been independently estimated to contain 24 million barrels of proven, undeveloped recoverable oil using a 26% recovery factor of the oil in place in just the shallowest of several zones using then conventional recovery methods.
Significantly, the Company is engaged in negotiating for additional interests in the area and, therefore, did not disclose the specific location nor the amount of cash and unregistered, restricted stock used in the purchase, although it noted the stock paid amounted to less than 5% of the Company's outstanding shares.
As part of the purchase terms, Tri-Valley agreed to a $5 million, two-year work commitment. With that obligation already fully funded, Tri-Valley plans to immediately initiate efforts to rework shut-in wells, and in addition, to drill and test a new horizontal well to generate production cash flow in 2005 and beyond.
"New technology is now available to fully develop this property and we are confident we can achieve a much higher recovery than the original estimates. Also, oil and gas prices are much higher than those used in the original calculations which further bolsters the economic recovery potential. We are also excited by the existence of several deeper, untested zones which offer a substantial exploration component to add even more upside," said Joseph R. Kandle, president of Tri-Valley Oil & Gas Co., the Company's operating subsidiary.
"This acquisition puts Tri-Valley on the map with a significant proven
undeveloped reserve base and the potential to multiply it substantially with
advanced technology and exploration success. It's a strategic part of our
goal to add major intrinsic value per share and build increasing cash flow for
2005 and the ensuing years. This project dovetails with our high impact
exploration programs also underway for rapid value buildup," said F. Lynn
Blystone, president and CEO of Tri-Valley Corporation.
- Tri-Valley Concludes Phase I of Claflin Drilling Program (Apr 28)
- Drilling Commences at Tri-Valley's Claflin Project (Apr 04)
- Tri-Valley Starts Development, Enhanced Oil Production at Claflin Project (Feb 10)