California O&G Ready for Bayou State Start-up

California Oil & Gas Corp. on Thursday reported that its Haas-Hirshc #1 (Krotz Springs Unit Well #60) in Louisiana has been completed in the lower of two potential zones.

Nine feet of perforations over the 16 feet of log-indicated pay in the Second Cockfield zone flowed at rates of approximately 900 mcf of gas per day during clean-up, with no water. The well was flowed for an initial period of 17 hours and was then shut-in to connect to permanent production equipment. Further testing and production will be conducted into the flowlines at the location, with the produced gas going to sales. Current plans are to produce the well for several days and then conduct a pressure transient build-up test. Stimulation or other alternatives will be considered to increase production rates based on the results of the flow and build-up test.

The company also announced that its definitive Special Operations Contracts ("SPOC") with the Chilean government were executed on Wednesday at Palacio Astoreca, a national monument in the city of Iquique. Representatives of March Chile Agencia, the Ministry of Mining and Energy, the Governor of Iquique, the Mayor of Pica and the Canadian Ambassador to Chile, were among the dignitaries who were on hand for the signing ceremony.

The SPOC was the final approval needed before exploration drilling for gas and oil on the Pica North and Pica South blocks in the Tamarugal Basin of Northern Chile could begin. The SPOC outlines the exploration and development rights on the blocks, which are valid for a period of 35 years and detail the work commitments required for each of the two blocks. California Oil & Gas has an agreement with March Resources Corp. to jointly explore these blocks, which cover approximately 3,900 square miles (2,500,000 acres).

Field work in the area and preparation of the drilling site will begin immediately in order to meet anticipated spud of the initial well in the summer.