Solimar contracts rig for Guijarral Hills drilling
Tuesday, Aug 31, 2010
Kenai Rig -10 contracted to commence drilling 15 October· Two wells planned on extension of the plus 50 million barrels produced Guijarral Hills field
· Targeting up to 10 million barrels recoverable of light oil which Solimar believes is an extension of the previously producing field.
· Farmout partner funding most of the well program costs
· Solimar Operator and retaining up to 40%
Solimar Energy Limited (ASX:SGY) has executed a contract with Kenai drilling for the use of Kenai Rig – 10 for the Company’s planned two well appraisal drilling program at Guijarral Hills in the San Joaquin Basin, California.
The drill program is the subject of a Farmout Agreement executed with Xploration Inc, a California based oil and gas investment company that will fund most of the costs of the two well program.
The Guijarral Hills prospect is the mapped extension of a light oil with gas field that finished producing in the 1990’s. Solimar maps extensions of 4 previously oil productive reservoirs into the area where the wells will be sited. All the oil reservoirs are sandstones with target depths ranging from approximately 7,000 feet to over 10,000 feet. The first well is planned to 10,200 feet and if successful up to 12 potential development well locations are indicated. Based on analysis of productive well histories in the Guijarral Hills field, pump assisted initial production rates of over 400 bopd per well are targeted.
Recoverable light oil resources of up to 10mmbbls are estimated with follow up potential in the Company’s 2,560 acre holding.
If the well program is successful Solimar expects that it can quickly bring the project into production taking advantage of readily available local services and equipment.
The project remains subject to approval of assignments of the various partner interests which are in process.
ASX listed partners in the Guijarral Hills project, listed at post Farmout equities will be:
Solimar Energy (Operator) 39.8%
Neon Energy Limited (ASX:NEN) 19.2%
Source: Solimar Energy
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