Solimar Snaps Up 100% Stake in Southeast Lost Hills Project
Solimar has signed an agreement with Quest Petroleum Limited to acquire their 50% working interest in the Block A and Block B leases at Southeast Lost Hills ("SELH") including the existing wells and associated facilities. Solimar Energy currently holds the other 50% working interest in SELH.
The agreement shall be effective upon the date the lessor consents to the assignment of Quest Petroleum's 50% interest to Solimar Energy.
In consideration Solimar Energy will issue in total 4,000,000 listed ordinary fully paid shares, $AUD 35,000 in cash plus cancelling the current outstanding billings of approximately US $18,000. The consideration will be paid in three tranches:
- $AUD 35,000 to be paid upon execution of the agreement.
- 2,000,000 shares to be issued upon assignment of the leases.
- 2,000,000 shares to be issued within 4 months and subject to a 12 month escrow from the date of the agreement.
Southeast Lost Hills Project
The Southeast Lost Hills Project is located in the San Joaquin Basin, California, along the southern flank of the large Lost Hills Anticline. The Lost Hills structure is a large feature that has already produced in excess of 400 million barrels of oil equivalent ("MMboe") to date to the north of the Jack Hamar 3-13 discovery.
The Southeast Lost Hills gas accumulation is a combination structural and stratigraphic trap. The reservoir targets are shallow Pliocene sands that pinch out around the flanks of the Lost Hills Anticline. Seismic amplitude anomalies are associated with the presence of these hydrocarbons.
Since the Southeast Lost Hills project is a shallow play, with target depths of not greater than 4,000ft, it is expected that commercial development costs will be relatively low. Solimar Energy believes there is potential for a substantial gas accumulation in the shallow Pliocene reservoirs around the Lost Hills structure. The commercial development potential of the project is enhanced by low drilling costs due to the shallower reservoirs, strong gas demand in the area and local infrastructure.