In a part of California known for big oil and big agricultural interests, and the big bucks that go along with both, deep drilling is getting a huge boost in the southwestern parts of oil/gas-rich San Joaquin Valley west and northwest of Bakersfield with the announcement that a consortium of major E&P talent became the third group to begin a deep drilling project in the area.

The entry of Vancouver, BC-based Ivanhoe Energy and its partners into the deep drilling raises the expectations that substantial new natural gas supplies may eventually flow from wells below the 19,000-foot level. The first of the recent deep wells, the so-called Berkley discovery in East Lost Hills, about five miles southeast of Ivanhoe’s test well begun Aug. 23, is producing 15 MMcf/d and 900 b/d of oil.

More interest in deep drilling in the area comes from Tri-Valley Corp. of Bakersfield, CA, which has its $11 million Ekho No.1 well, located about 12 miles northwest of Ivanhoe well site. Ekho’s backers are looking for more funds from current and new investors before they moves forward with additional fracturing of the first well, which Tri-Valley CEO Lynn Blystone has touted the field as having the potential for 16 million barrels of oil and 20 Bcf of natural gas reserves.

Ivanhoe, which is headed by several former Occidental Petroleum senior E&P executives, has Aera Energy as its operating partner. Aera is an alliance of the Exxon, Mobil and Shell production properties in California. In addition, there are four other partners: PYR Energy Corp., Westminster Petroleum, Inc., North Arm Resources, and Ceniarth, Inc.

“It is going to be interesting to watch (the Ivanhoe play),” said one veteran Bakersfield-based industry observer. “They’ve finally put this thing together, and it is on Aera land (Mobil properties). We’re all watching it pretty closely, but it will be a while.”

Ivanhoe Corp. hired a number of former international E&P executives from Occidental, which owns the nearby Elk Hills reserve, which until 1997 was owned by the federal government.

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