California Oil & Gas Corp. – Corporate Update
California Oil & Gas Corp. (OTCBB: COGC) is a junior oil and gas exploration company with agreements for projects in California and Louisiana in the United States, and Chile, South America. It intends to use the proceeds of the recently announced private placement of $1,000,000 to advance these projects and agreements.
In California, work is underway to acquire leases over areas considered prospective that will form the core of the Company’s planned exploration program. Arrangements for 3-D seismic programs on leases acquired earlier this year are currently being finalized.
In Louisiana, the Company has reached agreement to acquire an additional 10% working interest (subject to a 1% overriding royalty) in the Krotz Springs project, increasing its working interest to 25%. A drilling rig has been tentatively scheduled to drill a directional well to test the Cockfield Sand at 10,700 feet (TVD). The target was identified by 3-D seismic and is mapped updip from a well which commenced production at 8 million cubic feet of gas and 277 barrels of condensate per day, and which produced 10 BCF of gas and 348,000 barrels of condensate before production ceased because of bottom water encroachment. The proposed well is designed to target the apex of the productive zone, significantly higher than the previous well. The well is anticipated to spud in January 2007 and if successful, production can be tied into existing facilities and pipelines.
Elsewhere in Louisiana, leasing work continues in preparation for a planned 3-D seismic program.
In South America, the Company’s local partner has encountered delays in finalizing an agreement with the Chilean government for the Pica North and Pica South blocks in Tamarugal Basin. It is now anticipated that the initial well on the Pica North concession will spud in the first quarter of 2007. The Company has an agreement to earn 50% of the Pica North concession by participating in the drilling of two exploration wells. The target is a large natural gas reservoir in an area with markets for natural gas, but which is deficient in supply.
On behalf of the Board
John G. F. McLeod, President
Forward Looking Statement
Statements in this news release that are not historical facts are forward-looking statements that are subject to risks and uncertainties. Words such as “expects”, “intends”, “plans”, “may”, “could”, “should”, “anticipates”, “likely”, “believes” and words of similar import also identify forward-looking statements. Forward-looking statements are based on current facts and analysis and on forecasts of future results, estimates of amounts not yet determined and assumptions of management. Forward-looking statements in this news release include statements about the Company’s belief that it can advance its projects overall, that it can acquire leases in California that will form the core of the Company’s planned exploration program, that if the directional well proposed for the Cockfield Sand is drilled, it will spud in January, 2007 and be put into production and that the production can be tied into existing facilities, that leasing work elsewhere in Louisiana will continue in preparation for a planned 3-D seismic program, that the initial well planned for the Pica North concession will spud in the first quarter of 2007 and that the Company will be able to participate in the drilling of two exploration wells at the Pica North concession. The Company’s actual results may differ materially from those anticipated in these forward looking statements due to any of a number of factors beyond the Company’s control. These risks and uncertainties include, among other things, the risks that are inherent in oil and gas exploration and otherwise inherent in the Company’s operations. These and other risks are described in the Company’s Annual Report on Form 10-KSB and other filings with the Securities and Exchange Commission, which can be viewed at www.sec.gov.