Denver-based exploration and production (E&P) independent Venoco Inc. drew attention in a recent financial commentary citing the renewed oil/gas production in formerly depleted fields in and around Los Angeles as proof that E&P activity can coexist in heavily populated urban areas (see Daily GPI, July 8).

A Venoco executive downplayed the “urban” E&P activity and the tie to concerns about hydraulic fracturing (fracking) in more heavily populated areas, but he nevertheless verified that the Reuters commentary was based on recent information in a quarterly filing with to the Securities and Exchange Commission (SEC).

Reuters columnist John Kemp focused on Venoco’s nearly two-decade ownership of production from multiple disguised wellhead production sites in and around the affluent Los Angeles suburb of Beverly Hills, including production at Beverly Hills High School, immediately adjacent to the Century City business-commercial-residential area.

Venoco Vice President Mike Edwards told NGI Monday that there were close to 120,000 barrels of crude produced from 19 conventional wells at Beverly Hills High last year and 103 MMcf of natural gas, but he noted that there hasn’t been any E&P activity at the site since 1997.

The high profile site, located next to heavily traveled Olympic Boulevard, has not gone unnoticed by environmental groups. Between 2003 and 2006 six lawsuits were filed against Venoco, the school district and others, by groups led by Erin Brockovich, who won a $333 million settlement with Pacific Gas and Electric Co. in a longstanding toxics case (see Daily GPI, April 7, 2008 and March 28, 2000).

More recently, Venoco entered into a settlement agreement in which all pending cases against the defendants will be “dismissed with prejudice,” according to Venoco’s SEC filing. The settlement is subject to the receipt of releases signed by each of the plaintiffs pursuing claims against the company and still needs the court’s approval.

Kemp wrote that even though many of California’s oilfields are “aging, exhausted and under the modern city of Los Angeles” they offer “lessons for the oil industry and environmentalists,” showing that steady production from Beverly Hills and several other surrounding sites demonstrate “it is possible to extract oil and gas even in highly urbanized areas.”

Meanwhile, Venoco is continuing with a move by majority owner Tim Marquez to go private. Completion of the financing of the deal, mostly through debt, is expected to come early in October, Edwards said.

Sustained relatively high oil prices and the advent of fracking and other technology advances have put more of a spotlight on California and independents such as Venoco.

Recently it was divulged that rising crude oil prices pumped up the drilling rig count in California to a 22-year high in July, and a lot of the action is in “urban plays,” previously dormant or downplayed fields from the state’s rich history of oil and natural gas production (see Daily GPI, Sept. 19). In some cases they are in areas now surrounded by residential development, and as such, operators are having to adhere to a long list of local restrictions regarding noise and environmental protection.

In Ventura County Venoco has increased production in the 65-well Montalvo field 20-30% in the last year to about 1,000 b/d, according to local news reports.

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