These exploration projects in the Coalinga and Yowlumne areas, are in addition to the Orchard’s previously announced joint venture with Aera at Northwest Lost Hills, the Belgian Anticline and Coles Leeve.
The five project agreements will give Orchard access to some of the Basin’s highly prospective acreage, adjoining large oil and gas fields, and these two final agreements would provide additional high impact projects for the company in 2007, Orhcard said.
It expected to have a working interest between 15% and 56.25% in the projects, which have a combined potential to contain from 95 to 170 million barrels of oil equivalent.
“For a company the size of Orchard, each project represents material events with major upside potential,” executive chairman Steve Graves said.
“Orchard has already demonstrated its exploration capabilities across the area of interest, and now looks forward to building a strong exploration relationship with Aera, which have been active in onshore California for decades.”
These future projects will be funded by production revenues and financing capacity, the company said.
The Coalinga project involves developing prospects in a highly petroliferous area below existing fields, which are currently producing 7,600 barrels of oil per day.
Under the agreement, Orchard has the exploration rights to propose prospects below productive depths over Aera’s fee and leased lands. In addition, Orchard and Aera have established an area of mutual interest of about 125,000 acres.
Orchard’s technical team expects the project area has the potential to contain from 25 to 100 million barrels of oil equivalent.
Meanwhile, Orchard is currently funding a 3D seismic based evaluation of the Yowlumne area's exploration potential.
Depending on the results, the company aims to participate with Aera in a deep exploration project.
The existing Yowlumne project field, discovered in the mid 1970s, has so far produced 20 million barrels of oil equivalent from the Pliocene/Miocene age Etchegoin and Monterey formations.
