Neon Energy Ltd., Perth, said it has discovered multiple hydrocarbon-bearing zones at the Paloma Deep prospect in the San Joaquin basin of California.
The well went to a total depth of 13,320 ft in the western part of giant Paloma oil and gas field in Kern County and is being prepared for production tests. Analysis of wireline log data confirms the presence of oil and-or gas in eight zones, including three unconventional shale oil zones, with a combined 1,000 ft of potential hydrocarbon pay.
The well had been projected to 15,500 ft (OGJ Online, Sept. 16, 2011). The well was drilled 310 ft into the Fruitvale shale, which exhibits characteristics of a producing oil shale and is interpreted to be 1,300 ft thick at this location. Due to the apparent success of this well and earlier drilling challenges, it was decided to cease drilling above the Round Mountain objective, which will likely be a target of future drilling.
Neon Energy said the potential pay intervals to be production-tested in this well or future wells includes the Paloma sands, Middle Stevens, Round Mountain, Lower Stevens, Fruitvale shale, Western Flank, Antelope shale, Lower Antelope shale, and Tulare sands.
“Most notably,” the company said, “the Lower Stevens sand encountered a column of more than 200 ft of continuous potential oil pay, with a high reservoir net to gross ratio. It is hoped that the reservoir will have sufficient permeability to allow an economic flow rate, and the company believes that this potential pay zone could extend over at least 740 acres of Neon’s gross 2,500 acre lease holding. If production testing confirms the economic producibility of the formation, the Lower Stevens alone could represent a significant resource.
“Also of note is the Lower Antelope shale, in which a combination of naturally fractured (brittle) shales coupled with a mature source rock make the 350+ ft section a prime candidate for unconventional production. A 34 ft sand within this interval produced one of the most marked oil shows encountered in the well.”
Neon Energy is operator with 75% working interest, and Solimar Energy Ltd., Melbourne, has 25% and is paying a promoted share of the dry hole and completion-testing costs up to an agreed cost cap.