Tartan Commences 170 Well Drilling Program in California
Tartan Energy Inc. announces a 170 development well, shallow reserve drilling program. The program will commence in April 2002 after execution of the U.S.$2.0 million production development loan. The program targets Shallow Etchegoin formations between 200 and 2,200 feet on 100% working interest leases in the Lost Hills Field in Kern County California, U.S.A. The 15 well first phase is expected to cost U.S. $1.575 million.
The development program is based on Tartan's six (6) successful appraisal wells drilled during the last 18 months. These appraisal wells consisted of five (5) vertical wells and one (1) horizontal well confirmed and expanded the understanding of the geology and reservoir parameters, tested completion techniques, and confirmed the technical viability of shallow horizontal wells. The appraisal wells proved up new reserves in the Etchegoin W3 formation, the deeper Etchegoin W5 formation and the very shallow Etchegoin E formation. To date, reserves established are 16 million barrels of oil consisting of 6.4 million barrels proven and 9.6 million barrels of probable reserves. Sproule & Associates established 10.1 million barrels of oil in an evaluation report published in January, 2000. An additional 5.9 million barrels of oil were established through subsequent evaluation of the appraisal wells by California based consultant, CalTerra Energy LLC.
The first development wells will target the W3 formation. The average W3 producer drilled on Tartan's acreage had initial production rates of 120 barrels of oil per day (BOPD), with a number of these wells having initial production rates in excess of 240 BOPD. Tartan drilled and completed two wells in the W3 formation and tested different completion techniques. The first W3 well started production 14 months ago at 70 BOPD, stabilizing at over 25 BOPD. The second W3 well started production at 110 BOPD and stabilized at over 45 BOPD. Tartan anticipates that future W3 wells will produce at higher rates due to optimization of completion techniques.
More than 40 wells will be drilled over the next 18 months to develop the W3 formation. Estimated initial production potential of the W3 formation exceeds 4,000 BOPD. In conjunction with the W3 formation development, exploitation of the W5 and E formations will be phased in with an additional 130 wells, including injectors. Apart from shallow reserves, Tartan has an 80% working interest in both the Medium Temblor formations between 3,500 feet and 10,000 feet, and the Deep Temblor formations between 10,000 and 20,000 feet. Sproule's evaluation of the Medium Temblor determined a recoverable potential exceeding 12 million barrels of light gravity oil and 35 BCF of gas. CalTerra's analysis of the same Medium Temblor indicates 60 million barrels of oil and 65 BCF of gas potentially recoverable. Tartan expects production rates of 500 to 1,500 BOPD from each Medium Temblor well. Tartan plans to retain and drill the Medium Temblor rights by year-end 2002 and to farmout the Deep Temblor.