Unconventional work eyed in San Joaquin basin field

Neon Energy Ltd., Perth, said it has begun discussions with prospective partners and service providers that could contribute expertise and funding toward an unconventional development of the Lower Stevens B zone in tandem with the Lower Antelope shale in Paloma field in California’s southern San Joaquin basin.

Having tested the Paloma Deep-1 and 2 wells, the company will postpone testing of secondary targets in the shallow Paloma sand to avoid compromising the company’s ability to reenter the wells to collect further data from the deeper zones.

Neon Energy holds an 85% working interest in 2,847 acres in Paloma field, and Solimar Energy Ltd., Melbourne, has 15%. Paloma field is 7 miles long and 3 miles wide and essentially abandoned. The Lower Stevens produces 80 b/d of oil in the southeastern part, and the Upper Antelope shale is being produced by a single well in the eastern part, Neon Energy said.

The company noted that the Paloma Deep-1 and 2 wells confirmed hydrocarbon pay in as many as eight reservoirs and confirmed potential for commercial development of unconventional resources in the Lower Antelope shale, Fruitvale shale, and Lower Stevens B sand.

Neon Energy said the Paloma discoveries represent a resource likely on the order of 200-300 million bbl of oil equivalent in various members of the Miocene Monterey formation.

An unconventional development would involve high angle or horizontal wells and hydraulic fracturing and other stimulation methods, the company said.

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