Tri-Valley to Drill Three More Vaca Wells
Tri-Valley Corporation (NYSE AMEX:TIV) is preparing to drill three more horizontal wells at its Pleasant Valley leases near Oxnard, California. All will be drilled into the same shallow Vaca Tar Sand formation where the Company already has seven productive wells on cyclic steam production.
“As we put more heat into the reservoir, we are seeing handsome production increases after each steaming and are confident that these properties will deliver several thousand barrels of oil per day as we continue to drill out the leases and then convert to continuous steaming through injector wells,” said F. Lynn Blystone, chief executive officer.
Additionally, four of the existing vertical wells on the newly acquired Lenox Ranch Lease at Pleasant Valley will begin cyclic steaming this week. While not as prolific as the newer horizontal wells drilled by Tri-Valley, the 19 existing vertical wells drilled by a prior operator on the Lenox Ranch Lease, appear to be responsive to re-working and are expected to contribute several hundred barrels of oil per day to overall oil production as well as help add heat to the producing zone where the new horizontal wells will be drilled.
“When we acquired the rights to these and other properties in the area, oil prices were below $40 per barrel and even then we felt modern recovery technology would enable us to profitably produce them. Our experience now confirms that the Vaca wells can produce at daily rates which are considerably above our initial conservative estimates, especially now that the prices are over 50% higher now than when we first acquired these projects. We now have a major grass roots development project underway to build share value and reward our drilling partners,” Blystone said.
A new drill site is being prepared on the Lenox Ranch Lease and a rig is expected on-site by mid November to commence drilling this quarter. The Company expects to add significantly to its proven oil reserves for 2008, and aims to drill at least 10 more horizontal Vaca wells in 2009.
“Despite this dip in oil prices due to temporary lessening demand, any economic recovery aided by currently lower energy prices will soon bump into limited daily production capabilities worldwide, and we expect to see very substantial price increases for our product down the road in that event.
“We note that heavy oil is gaining favor with refiners as light oil supplies wane. This is being increasingly reflected by the recent tightening of the price gap between heavy and light oils, which is occurring today. Tri-Valley is well positioned to perform and benefit in that transition,” said Blystone.
Tri-Valley has been in business as a successful operating company since 1963, and has been a full reporting 12 (g) publicly traded Delaware Corporation since 1972. Tri-Valley Corporation stock is publicly traded on the American Stock Exchange under the symbol “TIV.” Our company website, which includes all SEC filings, is www.tri-valleycorp.com.
This press release contains forward-looking statements that involve risks and uncertainties. Actual results, events and performance could vary materially from those contemplated by these forward-looking statements which includes such words and phrases as exploratory, wildcat, prospect, speculates, unproved, prospective, very large, expect, potential, etc. Among the factors that could cause actual results, events and performance to differ materially are risks and uncertainties discussed in the company’s quarterly report on Form 10-Q for the quarter ended June 30, 2008, and the annual report on Form 10-K for the year ended December 31, 2007.