However, the company said it believed commercial flows would only be achieved using artificial lift, which is common for wells in the area.

Most recently, Salinas said 36 degree API oil with minor associated gas has been tested in the main reservoir, Zone 3, at a depth of between 12,490 and 12,690 feet (3807-3868m).

The company says test results indicate this zone has better reservoir characteristics than the lower zones and is likely to have a higher pressure. While a flow rate has yet to be confirmed, the fluids recovered were primarily oil with lesser amounts of introduced testing fluids.

In addition, 32 degree API oil with minor associated gas has been tested, at currently unconfirmed rates, from the lower two zones – Zone 1 at 12,680-13,020 feet (3919-3968m) and Zone 2 at 12,700-12,840 feet (3871-3913m).

Interpretation suggests these zones are geologically related and likely to be in the same reservoir pressure regime, Salinas said.

Preparations are now underway to install an artificial lift system to put the well on a longer oil production test, before a decision is made to flow test the upper zone of interest – Zone 4 at 12,140-12,400 feet (3700-3779m). The test is expected to start in a week, subject to permitting and equipment availability.

“Salinas believes a commercial flow of oil will be achievable from the well with the assistance of artificial lift, which is common practice for the general area,” Salinas managing director John Begg said.

“The test results so far, combined with available electric log data strongly indicate that all porous intervals in the well between 12,140 feet and total depth at 13,102 feet contain oil.”

If completed for commercial production, Salinas will earn 50% of revenue from the well.

The North Yowlumne prospect has potential to contain more than 100 million barrels of recoverable oil, and is immediately adjacent to the 113 million bbl Yowlumne oil field.

Partners in the South Buena Vista project are (after payout): Ivanhoe Energy (56.25%), Salinas Energy (25%), Statesman Exploration (12.5%), NEG (6.25% and operator of the initial exploration well).