Oxy expands production at California giant

Alan Petzet
OGJ Chief Editor-Exploration

HOUSTON, Feb. 23 -- The giant discovery that Occidental Petroleum Corp. revealed in mid-2009 in California’s San Joaquin basin has produced 19.4 bcf and 1.5 million bbl of oil and condensate through December 2009.

Output at the end of January was 145 MMcfd and 7,500 b/d of liquids from 15 wells, up from 28 MMcfd and 3,000 b/d from 4 wells in the first quarter of 2009.

The company plans to drill eight wells in this year’s first half as it explores the yet undelineated limits of the Kern County field, to which it attributes an initial 150-250 million boe recoverable (OGJ Online, July 23, 2009).

Oxy has an 80% working interest in the discovery, which it said has about 600 ft of net pay with high permeability in the gas-condensate zone and 400 ft of net pay in deeper oil zones it described as “more complicated.” About 10 of the wells have tapped the oil pay, and none of the zones are below other producing formations.

The company hasn’t identified the geological formations except to say that they represent a new play concept Oxy compared with an offshore deepwater structure.

Oxy expects to activate skid-mounted gas processing facilities by the 2010 second quarter, which will add to its gas production. The skid-mounted plant may run 85 MMcfd, maybe enough for two wells, and “every quarter it looks like we need a bigger plant,” the company said at the end of January.

Plant size is what controls sizable increases in production, and the company is to decide shortly how much to expand its 400 MMcfd Elk Hills gas processing plant.

“The wells generally don’t deplete very much, and we’re also not necessarily pushing the wells as hard as they might at this point, so right now they are holding out pretty well,” Oxy said.

Meanwhile, the company has added about 200,000 net acres in fourth-quarter 2009 in the heart of the producing area around Buena Vista and Elk Hills fields west of Bakersfield and said similar discoveries are possible on its overall 1.3 million-acre holding in California. Oxy is also pursuing shale oil on the acreage.

Contact Alan Petzet at alanp@ogjonline.com.

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