Tri-Valley's Second Temblor Development Well Taps Oil Sands

Tri-Valley Corporation has cut 100 gross feet of oil-saturated Tulare Sand and an additional 30 feet of Etchegoin Sand while drilling its second development well on its Temblor Valley West property adjoining the prolific South Belridge Oilfield some 40 miles west of Bakersfield, California. These intervals are about 100 feet high to the first well which is 3,200 feet to the east and the cuttings are dripping oil when broken.

The crew is preparing to take a core in the Diatomite zone, which is now penetrated. Meanwhile, the first development well is almost cleaned up from the hydraulic fracturing of the Diatomite interval and the Company will move to complete it for production shortly.

Both the Etchegoin and Diatomite typically have low Ultimate Recoveries (UR) of the oil in place. Tri-Valley uses 13 percent UR and 11 percent UR respectively in making its estimates of potential recovery. However, even a one-percent increase in the UR for the estimated oil in place in the Diatomite alone would potentially add another five million barrels on the Company's recovery model for the Temblor property.

"We will have a much better understanding of the practical upside potential once we have a core section of the actual formation to analyze. This will also tell us what drilling and recovery techniques to employ for the full development program to build production, revenue and reportable reserves in the optimum way," said Joseph R. Kandle, president of both Tri-Valley Oil & Gas Co and Great Valley Production Services LLC, the operating and well drilling subsidiaries respectively.

To build significantly increased production, revenue and reportable reserves, Tri-Valley has embarked on a drilling campaign in its producing and producible properties which accommodate very dense well patterns to enhance recovery of the oil in place.

In addition to the Temblor Valley West program, Tri-Valley is also undertaking, this quarter, a drilling project on its Pleasant Valley heavy oil property near Oxnard, California, which will require steaming of the typically very long-life wells in the area. Tri-Valley will employ modern recovery methods never before used in both these properties and expects to achieve higher than conventional production and UR rates as a result.