San Joaquin basin shale oil drawing more explorers

By OGJ editors

More operators are being drawn to explore shales and other formations known to or suspected of holding petroleum liquids in the northern San Joaquin basin in California.

Among the geological objects of the activity are the Monterey and Kreyenhagen shales, the Temblor sandstone below Monterey, and the Avenal sandstone below the Kreyenhagen.

Leasing and drilling are fanning out in Fresno and Kings counties on either side of Kettleman North Dome and Kettleman Middle Dome oil fields.

New Gulf Resources LLC, Tulsa, is drilling on the flanks of the Kettleman domes targeting the Monterey and Kreyenhagen shales. And KMD Operating Co., The Woodlands, Tex., has produced light oil from Kreyenhagen at two wells at Kettleman Middle Dome.

Hess Corp., New York, has received permits to drill as many as six wells and is believed to be targeting Kreyenhagen updip from and east of where Zodiac Exploration Ltd., Calgary, recently tested a deep horizontal well in Kings County on the eastern side of the basin. The formation is shallower to the west.

The Zodiac well flowed a subcommercial 60-126 b/d of 29° gravity oil from a 2,647-ft lateral in Kreyenhagen at an average vertical depth of 14,551 ft (OGJ Online, Feb. 27, 2012).

Another operator, Solimar Energy Ltd., Melbourne, has been focused on redeveloping 13-18° gravity degraded oil in the Temblor sandstone 8 miles southwest of Kettleman North Dome.

The Temblor oil was generated as lighter crude in the underlying Kreyenhagen, where Solimar said it will “inevitably also turn its attention to work programs specifically designed to evaluate whether commercial flows of light oil can be extracted from the shale.” The company said it is preparing for a core hole program to gather data on the Kreyenhagen.

Occidental Petroleum Corp., Solimar noted, has stated ambitious plans for the expansion of its production of oil from shales in California and is the largest acreage holder adjacent to Solimar. Solimar also has a right to back in for a 10% interest in the acreage that New Gulf is drilling.

The US Energy Information Administration has estimated that 64% of the shale oil resource in the US Lower 48 is in California and that San Joaquin is volumetrically the richest California shale basin, Solimar pointed out.

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