“The agreement to provide that gas through a major gas pipeline is also under negotiation along with the access permits required to run our spur line connecting the Jack Hamar gas wells to the gas pipeline,” Nuenco managing director Anthony Kain said yesterday.

“The target is to have the Jack Hamar gas field hooked up to a major Californian gas pipeline in the next quarter and the operator is acquiring pipeline tubulars and equipment to commence construction of the spur line in July.

“The proximity of the major gas pipeline means we can hook up the Jack Hamar Field through a line with the capacity to deliver 20,000,000 cubic feet per day at minimal cost.

“We look forward to gas sales revenue from sales through that line and note the operator now has approval for multiple further drill sites within the South East Lost Hills joint venture blocks to continue developing the shallow gas play in the Jack Hamar Field.”

Meanwhile, the shallow gas-testing program to establish production for this gas sale line from the five existing gas appraisal wells was continuing, Kain said.

A service rig has moved onto the section 13 pad to begin testing Jack Hamar 3-13, an extended reach directional well stepping out more than a kilometre south-west off the Jack Hamar 13 pad.

“It was the fifth appraisal well drilled on the gas discovery made at Jack Hamar 1-1 and effectively extended the gas reservoirs we identified with the three section 13 wells drilled to that point,” Kain said.

“Our analysis of the electronic logs and the mud logs on 3-13 revealed an interval over 1500 feet which contained one hundred net feet of potential gas sand which we look forward to testing.”

The testing program on the deeper Monterey zone in the Jack Hamar 1-1 well is also now underway.

The partners thought this well would need stimulation through fraccing.

But Jack Hamar 1-1 flowed oil and gas naturally at commercial rates with good reservoir pressures from the initial perforations over 13.7 metres between 2,500 and 2847m, according to joint venture partner and operator Orchard Petroleum.

“The first phase of the testing program called for perforating across the four intervals so an initial test of the gradients and formation permeability could be measured in designing an expected hydraulic fracturing program for the four intervals,” Orchard said.

“The perforations were completed and the well was being prepared for testing when the well kicked and began to flow oil and gas to surface. The well continued to flow until shut-in overnight when pressure built up to 1200psi.

“A second attempt was made to test but unsuccessful due to strong reservoir pressure and oil flow. As no production or flow rate monitoring equipment was on site, actual production rates were not measured."

The partners decided to defer further testing and put the well on production and monitor flow rates and pressures before planning the next phase of testing.

Current participants in the Jack Hamar gas field project are: Nuenco LLC 37.5%, Orchard Petroleum Inc 37.5% and Nahabedian Exploration Group LLC 25%.

Current participants in the Jack Hamar Monterey oil and gas field project: Nuenco LLC 37.5% and Orchard Petroleum Inc 62.5%.