Two California independents have agreed to expand their partnership to drill 30 wells in the Rio Vista field, considered to be the largest dry natural gas field in the state.
El Cajon-based Royale Energy Inc. said its joint venture with California Resources Corp. (CRC) is to drill 30 wells throughout the Rio Vista, which is in the Sacramento–San Joaquin River Delta in Northern California.
The agreement would provide Royale up to three years to drill to any one of the multiple stacked formations in the field, which it said was discovered in 1936. Rio Vista over its lifetime has produced about 4 Tcf from more than 15 stacked gas reservoirs, management noted.
“This new agreement expands the joint venture development area to the entire Rio Vista field,” management said. “Royale will now have access to a larger area and more reservoirs to drill lower risk infill development wells, with significantly larger reserves, than had been available under prior agreement.”
Royale noted that the agreement is coming “at a time of upward trending natural gas prices” because of declining nationwide inventories.
Royale’s primary operations are in the Sacramento/San Joaquin basins. It also holds acreage in Utah and along the Gulf Coast of Texas and Louisiana. CRC, based in Los Angeles, works exclusively in California and often uses JVs to balance cash flow, with its flagship property the Elk Hills field.