California is crying out for energy. Plans are afoot to increase the US state’s electricity capacity by 140 megawatts this year and 132 MW of that are expected to come from natural gas fuelled generators.
The price of natural gas in California is running at between $US6 and $US8 per thousand cubic feet of gas and some pundits have predicted it could go as high as $US10 this year.
The company is also preparing to lay 20 million cubic feet a day of pipeline to connect the Jack Hamar gas field to a major gas pipeline owned and operated by a major Californian gas supplier.
Nuenco has focused on the South East Lost Hills through a joint venture and the initial push in that region has been the Jack Hamar 2-13 and 3-13 wells.
Test results from those wells indicate the project is on track to meet the initial production target of six million cubic feet of gas a day.
Jack Hamar 3-13 flowed at 1.5 million cubic feet of gas a day and Jack Hamar 2-13 is producing at 1.4 million cubic feet of gas a day.
The proposed pipeline will connected the Jack Hamar 1 and 13 pads through about 2.4 kilometres of line to a major line a few kilometres to the west of the field.
At the end of the quarter Nuenco had about $1.4 million cash in the back, thanks partly to a $2 million cash raising in the quarter.
In the South East Lost Hills blocks, Nuenco has a 37.5%, working interest to match the interest held by fellow Australian petroleum player Orchard. The Nahabedian Exploration Group holds a 25% working interest while lease owners Aera LLC (Shell and ExxonMobil joint venture company) will have a royalty on oil and gas produced.
