Tri-Valley to Accelerate Ekho Project Evaluation

Tri-Valley Corp.

California-based Tri-Valley Corp. plans to apply modern technology to North America's deepest oil producer when it hydraulically fractures the McClure Shale in the Tenneco Union GBR 66X-3 well some 1,320 feet north of the company's Ekho No. 1 deep well.

Now owned by Tri-Valley, the 66X-3 was drilled to 18,880 feet in 1975 and produced about 10,000 barrels from the Vedder Sand to claim the record as North America's deepest producing oil well before down hole problems not understood at the time caused the well to be abandoned. The 66X-3, along with the Great Basins 31X-10 drilled to 21,640 feet about 2,300 feet to the west southwest, became the data wells for Tri-valley's 19,085 foot Ekho No. 1.

Comprising more than 1,000 feet of oil saturated gross interval in both the Ekho No. 1 and the 66X-3, the McClure Shale formation is of low permeability and requires treatment that was untried in the area in the 1970s. By fracing the McClure section in the 66X-3 Tri-Valley is able to test a wider horizon faster in the Ekho Project and preserve the Ekho No. 1 well for other treatments as the company seeks to find a method to extract the bounty at commercial rates. It also allows for testing the shallower McClure from 12,880 to 14,000 feet while testing the Santos Shale in the Ekho No. 1 from 17,500 to 18,000 feet.

Data from all three wells, including core from the Ekho No. 1, suggests all four deep formations totaling more than 2,500 feet of gross interval of oil- and gas-rich zones could potentially contain 1 million barrels of oil equivalent (BOE) in place per acre using conventional oil industry factors--in this case, 400 BOE per acre foot in-place, common for the area. However, the dense formations currently inhibit the flow of the super-high-quality oil and gas discovered. Tri-Valley is treating these zones with modern techniques in an effort to stimulate flow at commercial rates and thus capture a bonanza reward for its shareholders and project investors.

"Having more than one deep well to work with on these multiple horizons enables us to test the McClure now rather than wait for testing of the Santos Shale and the Olcese Sand before we can get to the McClure in the Ekho No. 1," said Joseph R. Kandle, president of the operating subsidiary Tri-Valley Oil & Gas Co. "We can really accelerate the evaluation of the project opportunity this way. Testing this McClure interval also gives up data that might be useful on our big natural gas discovery in the McClure, the Sunrise Natural Gas Project, near Delano, Calif. about 20 miles away from the Ekho and 66X-3 wells."