Deep drilling in the southwest end of California’s central SanJoaquin Valley is awaiting more testing work to prove that backers’claims of substantial new oil and gas supplies below 15,000-footdepths are, in fact, commercially available.

Tri-Valley Oil & Gas Co., operator of Project Ekho No.1 wellabout 45 miles northwest of Bakersfield, says it is extensivelyevaluating procedures since California oil and gas fields have nohistory of fracturing at extreme depths, let alone the hightemperatures and pressures involved in Ekho.

Tri-Valley’s latest move is to attempt to fracture a deep-lyingtight sand formation at the 19,100 to 19,600 level, according toLynn Blystone, Tri-Valley CEO, who just returned from two weeks ofscouting longer term E&P prospects in the Middle East.

An internal document from Tri-Valley called the fracturing “apioneering effort to disprove the old and outdated concepts of overtwo decades ago” which are skeptical about fracturing at theexcessive temperatures and pressures found in deep drilling.Earlier attempts in Oklahoma and Louisiana mingled successes withblowouts, equipment failures and cave-ins.

“There has never been anything done in California like this,”Blystone said Monday. “It is not impossible; it is just going torequire a lot of (pre-drilling) modeling to give us a good firstshot to do it.

“If we successfully fracture this well, we have a super giantoil field with a huge amount of associated natural gas.” Hoping tocomplete the fracturing by year end, Blystone said the currentestimates for the Ekho No.1 well — the first of a seriesTri-Valley intends to drill with backing from a number of smallCanadian producers —- envision up to 15 million barrels of oiland about 18.3 Bcf of associated natural gas.

“When we frac this well we are going to have a field,” Blystonesaid. “Because when we drilled the well earlier we were looking fora fractured formation already in place to get the production. Thisparticular hole is not fractured, so we are in tight sand. If wecan show that the tight sand can be fractured, then we are okay.

“We’re looking at potentially $500 million (worth of oil andgas) out of this one hole; that is why we are really testing thiscarefully to get the right protocol.”

Blystone said the fracturing is a continuation of the ongoingtesting and will not drive up the E&P program’s budgeted cost.He maintains that even with the need to fracture well No. 1,Tri-Valley’s costs will be “half the cost” of what a rivalCanadian-based deep-drilling effort is spending per-well onneighboring acreage.

In an internal document dated Sept. 28 and aimed at answeringskeptics on the Tri-Valley board itself, Joe Kandle, Tri-Valleypresident, projects in oil alone that Ekho first well could bringin $600 million gross revenues, based on recent high prices. Theinternal communications said Tri-Valley has the potential to drillup to 50 locations in a 320-acre block tied to Ekho No.1.

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