Vancouver, BC-based East West Petroleum Corp., an independent exploration/production (E&P) company, said Monday it has expanded its position in the southern San Joaquin Basin, about 20 miles south of Bakersfield, CA. It is one of three separate areas in the region where the company is active, including part of the Monterey Shale play.
Through its wholly owned subsidiary, Avere Energy Corp., East West increased its interest in the Tejon Ranch Main Footwall to 50% by purchasing a 28.75% working interest from Solimar Energy Ltd. for $110,000, increasing its position in Tejon Main from 685 acres to 1,575 net acres. East West has additional acreage in Tejon Extension and a pure exploration play in White Wolf.
Company officials characterized their latest purchase as providing additional exposure in "the reemerging San Joaquin Basin," citing Occidental Petroleum Corp.'s (Oxy) 2009 discoveries and more recent work as increasing interest in the area south of Bakersfield in the San Joaquin Basin.
"Solimar [which is keeping a 10% interest] gave us an opportunity to increase our position, and we took it," East West CEO Greg Renwick told NGI's Shale Daily. "What we're chasing here in the Tejon Ranch area are fields and sands that we know are productive, so these are conventional plays." Renwick called White Wolf a "fractured shale play," but the rest are conventional with nearby oil and natural gas production ongoing.
An East West spokesperson noted that Oxy recently reported that in the past year it had made a 50 million boe discovery in the San Joaquin Basin that it was hoping to double through further appraisal drilling in 2013-14.
"There is a deeper zone on Tejon Main that we think is quite similar to the discovery Oxy made a little more than three years ago," Renwick said. "[Ours] is just a deeper play that has never really been tested thoroughly, so that is probably the most exciting part of the Tejon area."
Renwick said that the Monterey Shale in the Tejon Ranch area, about 80 miles north of downtown Los Angeles, is what he called "immature," and East West is "not chasing it, per se."
East West's licenses are all in the southern-most end of the San Joaquin Basin, between North Tejon and Tejon fields that have cumulatively produced 60 million barrels of oil and 252 Bcf of natural gas, the company said. The Canadian-based E&P likes the fact that as one of the longest-running oil producing regions in the nation there is plenty of infrastructure and end-user markets nearby, including Los Angeles refineries 60 miles south and the Kern [County] Oil Refinery 30 miles north.
Renwick said his company's prospects in the San Joaquin Basin range from shallow, low-risk drilling opportunities to an "emerging high-potential deeper play."