East West Petroleum Corp., Vancouver, BC, and Lani LLC, private Ventura, Calif., concern, will launch a joint exploratory program in the San Joaquin basin in California.
East West will also contribute $500,000 (US) as part of Lani’s planned restructuring as a public US company. Lani has amassed an exploratory acreage position in the southern part of the basin and identified a number of oil prospects and leads.
East West will assume a 21.25-25% net participation interest in Lani’s acreage position, contributing $2.5 million to drill two prospects and acquire more leases. Drilling is expected to begin by the end of 2012 Lani as operator.
East West noted that Occidental Petroleum Corp.’s 2009 discovery of 150-250 million boe in the basin’s deeper geologic section is producing 150 MMcfd of gas and 7,500 b/d of liquids. East West and Lani will focus on shallow oil prospects and leads and also target the deeper section that is thought to have geological similarities to Oxy’s discovery.
Based on an independent assessment, the Tejon shallow and deep leases, in which Lani has a 42% participation interest and which constitute part of the farm-in acreage, have mean unrisked gross prospective resource potential of 16 million boe. The acreage lies between two fields that have yielded a combined 58 million bbl and 252 bcf of gas from the primary zones of interest, attesting to the presence of a proven petroleum system.
In addition to the farm-in, East West has agreed to enter an area of mutual interest with Lani covering the southern part of the basin. Under the terms of the AMI, the companies will target investment opportunities including the acquisition of as much as 10,000 gross acres in the next 6 months. East West will participate for 25% interest.
East West has other interests in India, Romania, Morocco, and Canada.