Solimar Expands Exploration in Q2
Solimar Energy has released a report concerning its second quarter for the 2008 fiscal year. The firm had a net operating cash flow of A$1.77 billion for the quarter, with A$1.49 billion cash on hand at the end of the quarter.
Solimar's Southeast Lost Hills Project Joint Venture executed a Gas Sales Agreement with a major Californian oil and gas company to buy gas produced from the Southeast Lost Hills Project. Initial gas sales from the Jack Hamar 3-13 well are expected to occur by the fourth quarter of calendar 2008. An independent reservoir assessment estimates that the recoverable gas for the Jack Hamar 3-13 well is between 0.20 to 0.70 BCF of gas.
Other Jack Hamar wells are still being evaluated which have the potential to add to commercial production volumes.
Seismic data across the area has been acquired and multiple prospects have been identified in an initial review. Further work is being done to establish a multi-well drilling program which is expected to commence at the end of this year.
The firm's Wellington Maricopa #6 well at the Maricopa Project has been a success, with initial production testing of this well produced oil at an average daily rate of 35 barrels of oil per day and variable amounts of gas, which was better than the Company’s expectation. Oil production has continued to average 35 barrels of oil per day with no decline since the initial production testing. To date, shipments of approximately 1,525 barrels of oil have been made. Solimar Energy's share is 50%.
A rig has been located to drill the Wellington Maricopa #7 well which is planned to be drilled in the fourth quarter of calendar 2008.ƒnAdditional follow-up locations in the project have also been identified, including approximately up to 3 vertical well locations and possibly 2 horizontal locations.
The leased acreage position has been increased from 40 to 120 acres across the potential oil generation area. A new geologic review is underway to identify further new drilling locations to increase potential production.
A new target location has been identified at the Ventura South Flank in Solimar's Ventura South Flank Prospect and a redrill opportunity is anticipated. A drilling rig has been contracted and is expected to begin operations in August 2008.
The South Ventura Flank Prospect is a high impact exploration target with the potential to contain 10-20 million barrels of recoverable oil and several billion cubic feet of natural gas. Exploration success with this project would be a material event for Solimar Energy.
The The Nesbit #5 exploration well in the Silverthread Project encountered approximately 800 feet of potentially oil bearing section in the Saugus Formation. Approximately 500 feet of the oil bearing section has been perforated for testing.
The Nesbitt #5 well is currently undergoing an extensive testing operation over a very large interval. Further evaluation of the data and production testing is required to determine the size and commercial significance of this potential oil discovery.
Solimar Energy has secured an 18.5% interest in a further 200 acres in addition to the
Company’s 20.0% interest in the original 400 acres.