California looks promising for Salinas

SALINAS Energy says the operator has recovered 32-degree API crude oil during testing over the lowermost zone of interest identified in its first Californian well, North Yowlumne ST-1, in the South Buena Vista lease area of the San Joaquin Basin.

The well is currently shut-in to observe the response of the reservoir and to gather pressure information.

Salinas managing director John Begg said the zone would probably require artificial lift to better assess its commercial potential.

“The recovery of 32 API gravity oil by the swabbing unit provides strong evidence that the lower zone is oil saturated and has permeability,” he said.

“We don’t believe at this stage that it is capable of flowing to surface without assistance but this is not an unusual occurrence and we intend to continue with the evaluation of this zone and hope to prove it has commercial potential.

“The results also give cause for optimism about what we may achieve in the other zones of interest in the well, in which we believe there are better sandstone units than in the zone we are currently testing.”

Further testing operations on the lower zones are likely to continue for several days before the higher zones of interest are tested.

If completed for commercial production, Salinas will earn 50% of revenue from the well.

The North Yowlumne prospect has potential to contain more than 100 million barrels of recoverable oil, and is immediately adjacent to the 113 million bbl Yowlumne oil field.

Salinas said this activity was in line with its exploration strategy to focus on strong flow rate reservoir targets in prospects with substantial oil reserves potential.

The company, formerly known as Renewable Energy, changed its name last November following an overwhelming vote in favour of the move at its annual general meeting. The company also announced it was changing direction by moving into oil and gas production and development, with an initial focus on large prospects in southern California.

Salinas is funding 50% of the cost of the well to earn its 25% interest. Partners in the South Buena Vista project are (after payout): Ivanhoe Energy (56.25%), Salinas Energy (25%), Statesman Exploration (12.5%), NEG (6.25% and operator of the initial exploration well).

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