The partners have now successfully tested two of their five gas wells in the Jack Hamar shallow gas play with testing continuing on a third and about to start on a fourth. These tests have all targeted different zones.

In May, Jack Hamar 2-13 flowed for five hours at a rate around 1.4 million cubic feet per day; 2-13 is now shut-in, awaiting construction of the pipeline.

New testing on the Jack Hamar 3-13 well has established a stable gas flow of 1.5Mcfpd cubic after 15ft of the well was perforated between 3485-3500ft above the initial zone tested earlier this month, according to Nuenco.

“When this latest section was perforated, pressure increased within an hour to 750psi at the well head,” Nuenco said.

“In the following two days this shut-in pressure increased to 1760psi before the well was opened for testing. The testing occurred over two days with varying choke sizes. The experienced local testing company running these tests noted 3-13 was a dry gas well with no water problems and good gas quality.”

At Jack Hamar 1-1, further testing on the deeper Monterey zone well with a pressure bomb is now completed to establish down hole pressures in the different perforated sections in this bottom zone.

This data was now being analysed to determine where and if to run a full fracture stimulation program in this part of the Monterey section, said Orchard Petroleum.

“During initial testing in preparing a hydraulic fracturing program for the deep Monterey Formations, it was reported that the well ‘kicked’ and produced around 25 barrels of oil,” Orchard said.

“Since then, further tests have continued. Shut-in surface pressure has reached 840psi. A series of well shut-in and pressure build-up sequences with downhole pressure gauges was conducted to allow for a transient analysis.

“Wellhead pressure increased to 1400psi during the testing sequences. A gas sample has indicated very rich gas with a heat content of 1384btu and a gas liquid yield of 5.2 gallons per cubic foot.”

Results from 2-13 and 3-13 have bolstered the decision to fast-track the development of this field and the gas sales pipeline, according to Nuenco.

“Strong flow rates from these wells will go a long way towards filling the initial target for this field set by the operator of 6Mcfpd,” managing director Anthony Kain said.

“Sales of natural gas into a gas sales pipeline will generate good revenues with domestic natural gas prices where they are now between US$6-8 per thousand cubic feet for good quality natural gas. These high prices show no sign of letting up now as a heat wave and electricity shortages start again in California and some commentators are saying the price of natural gas could go as high as US$10 this year.”

Orchard emphasised the Jack Hamar discovery was in relatively shallow formations where drilling costs were relatively low and flow rates were high, making the development economically attractive.

But the partners also said gas, high-value condensate and oil had been found at deeper levels at the prospect, offering substantial development potential for the future.

“We believe this play is going to take more time to understand and develop but are encouraged by these indications at this point of testing here,” Kain said.

The current participants in the Jack Hamar gas field project are: Nuenco LLC 37.5%, Orchard Petroleum Inc 37.5% and operator, and Nahabedian Exploration Group LLC 25%.

The current participants in the Jack Hamar Monterey oil and gas field project are: Nuenco LLC 37.5%, and Orchard Petroleum Inc 62.5%.