BAKERSFIELD, Calif., Dec. 8 /PRNewswire-FirstCall/ -- Tri-Valley Corporation (AMEX:TIV) has finalized agreements with the parties and will close on the purchased of the oil producing properties of Brea Oil Company in western Kern County, California for $2,850,000 cash it was announced today. While negotiating the purchase, Tri-Valley codenamed the property Temblor Valley as it is located on the Central Valley side of the San Andreas Fault Zone in line with several huge oilfields.
The primary property consists of 740 acres with 54 wells adjoining the South Belridge Oilfield, the third highest producing oilfield in the lower 48 states and is located approximately 40 miles west of Bakersfield, California. Current production on this portion of the Temblor Valley purchase is a modest 50+/- barrels of 20 gravity sweet oil per day with many wells idle or shut in, and the Company will move immediately to rework a number of wells to boost basic production.
Joseph R. Kandle, president of the operating subsidiary, Tri-Valley Oil & Gas Co., explained that field exploitation in the area can accommodate intensely close well spacing. Tri-Valley's template for development is an adjacent 480-acre lease with approximately 1,200 wells producing some 4,400 barrels of oil per day, suggesting a similar exploitation opportunity for Tri-Valley on its lightly drilled acquisition.
A smaller 160-acre parcel with seven wells also producing 50+/- barrels of oil per day comes with the Temblor Valley purchase and is located some 15 miles east of Tri-Valley's Bakersfield headquarters. The Company will rework some of those wells to enhance production while determining what new, deeper prospects might be available.
"We will add this property to our Opus I Drilling Program which stands ready to rapidly develop the property to reward both our drilling partners and shareholders while we continue our big target wildcat exploration," said F. Lynn Blystone, president and chief executive officer of Tri-Valley Corporation.
"Our technical staff is very enthused about the upside potential both from enhancing existing idle and marginally producing wells and the geologic promise of horizontal drilling and deeper, multi-zoned tests on these properties," Kandle said.
All of this coincides with Tri-Valley receiving its first purchased production rig which it believes it can keep busy just on its own inventory of oil wells in the southern part of the Central Valley and natural gas wells in the northern part. The Company expects a second purchased production rig which can also drill to 8,000 feet to be received in February, 2006 in time to drill new wells, including horizontal bores, on its producing properties.
Tri-Valley is also negotiating purchase of a third rig capable of drilling to 10,000 feet and plans to assign all rigs to a new wholly-owned subsidiary as the Company's inventory of wells and horizontal drilling prospects increases. While Tri-Valley will still have to contract outside rigs for its deeper prospects, it should be able to rapidly exploit its inventory of shallower production with its own fleet rather than continue to experience uncertain availability of equipment caused by heavy demand and limited supply.
This press release contains forward-looking statements that involve risks and uncertainties. Actual results, events and performance could vary materially from those contemplated by these forward-looking statements which includes such words and phrases as exploratory, wildcat, prospect, speculates, unproved, prospective, very large, expect, potential, etc. Among the factors that could cause actual results, events and performance to differ materially are risks and uncertainties discussed in the company's quarterly report on Form 10-Q for the quarter ended September 30, 2005, and the annual report on Form 10-K for the year ended December 31, 2004.
The Company is in its 43rd year of business as a successful operating company and for 32 years has been a full reporting 12 (g) publicly traded Delaware Corporation. Tri-Valley Corporation stock is publicly traded on the American Stock Exchange under the symbol "TIV" in the United States and is also traded in Europe on the Frankfurt Stock Exchange under the symbol "TVC WKN 911919." Our company websites, which include all SEC filings, are http://www.tri-valleycorp.com/ and http://www.tri-valley.de/.
CONTACT: F. LYNN BLYSTONE, PRESIDENT AND CEO
661-864-0500
toll free, 800-579-9314
fax, 661-864-0600
DATASOURCE: Tri-Valley Corporation CONTACT: F. Lynn Blystone, President and CEO of Tri-Valley Corporation, +1-661-864-0500, or toll free, +1-800-579-9314, or fax, +1-661-864-0600 Web site: http://www.tri-valleycorp.com/ http://www.tri-valley.de/
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