Tri-Valley Says its Sunrise-Mayel Well has Excellent Potenti

Tri-Valley Corporation has logged in excess of 2,000 feet of gas-saturated diatomite/porcelanite with excellent resistivity up to 10 ohms in its Sunrise-Mayel No. 2HR horizontal re-drill located in Bakersfield, California. The well has all the log and geologic features expected and is scheduled for hydraulic fracturing in late June to liberate the natural gas at what Tri-Valley management expects to be commercial rates.

This is the third attempt by Tri-Valley to unlock what independent engineers have projected as a potentially immense amount of natural gas in place in the tight McClure Shale formation beginning at about 5,800 feet. Independent reports on the nearly 300 vertical net feet of pay in the McClure Shale section show 40% porosity with 70% gas saturation, which calculates to about 80 billion cubic feet of natural gas in place per 160 acres. Tri-Valley has mapped some 6,600 acres of closure on its leasehold and speculates as much as 3.3 trillion cubic feet of natural gas may be contained in the prospect area. At this time the Company notes there is still risk of commerciality and will give no estimate of how much might be recoverable until it has completed and tested the rate of gas deliverability from the well. Considerable testing will be required over the larger area to prove up the ultimate size of the potential resource.

"We have made the gas discovery and are now in the engineering phase to determine if the formation will deliver at a commercial rate, and our confidence is high that we can exceptionally reward our drilling partners and shareholders with production success, especially as gas prices are now three times what we originally projected in our program design," said F. Lynn Blystone, Tri-Valley Corporation president and chief executive officer.

Drilling encountered indications of faulting and fracturing, with gas build-up at one point kicking mud over the blowout preventers. Joseph R. Kandle, president of the field operating subsidiary, Tri-Valley Oil & Gas Co., controlled the well and continued difficult drilling with consistently high connection gases. "This well and logs have given us every reason to pursue a completion, including hydraulically fracturing the reservoir to enhance deliverability, and we are running pipe as we speak," Kandle said.