Tri-Valley Rigs Up to Drill Sunrise-Mayel No. 2HR

Tri-Valley Oil & Gas will begin drilling the Sunrise-Mayel #2HR in the early part of May. The well is to be drilled horizontally into the Shafter-Wasco zone of the natural gas bearing McClure Shale formation near Delano, California. This zone was chosen because it has lesser amounts of clay that could inhibit the contained gas from flowing at commercial rates. Swelling clay in the previous well drilled into a lower section of five zones in the formation is believed to have interfered with establishing commercial rates of flow, so the uppermost zone has been chosen for the re-drill.

Tri-Valley believes its two previous test wells confirm very large volumes of natural gas in place and is now pursuing the right combination of hydraulic fracturing to initiate commercial flow of the gas. While the No. 2H briefly flared at the rate of 2.5 million cubic feet per day from a lower zone, the clay content was such that it swelled into the frac pattern enough to reduce the well to sub-economic status. Tri-Valley plans to re-enter that zone at a later date with other methods to tap what it believes could be upwards of 1 trillion cubic feet of gas in that section alone.

The Sunrise play has 6,600 acres of mapped closure with five zones totaling nearly 300 net feet averaging 40% porosity with 70% natural gas saturation. However, the permeability is low or, in oilfield parlance, a "tight sand" which requires horizontal drilling and hydraulic fracturing to provide enough pathways to liberate the gas at a commercial rate.

Independent engineering firms have analyzed the downhole data and projected as much as 80 billion cubic feet of gas in place per 160 acres. With gas prices continuing strong, Tri-Valley and its drilling partners are determined to bring the play to producing status as it could potentially be one of the largest dry gas fields ever found on the west coast.

"California now imports nearly 90% of its natural gas and we believe this field has the potential to make a significant contribution to this premium market and substantially increase shareholder value," said F. Lynn Blystone, Tri-Valley Corporation president and chief executive officer.