Solimar Energy – formerly Livingstone Petroleum – took over as operator, after acquiring a 50% stake in the project from previous partner Orchard Petroleum.

“The joint venture partners believe there is potential for a substantial gas accumulation in the shallow Pliocene reservoirs,” Nuenco said.

“And together with strong gas demand in the area which contains abundant infrastructure, combined with high gas prices, enhances the possibility of successful project development in the event of proving commercially viable production rates.”

Earlier testing was halted in mid-2006 due to technical issues and then by Orchard’s sale of its 50% interest in the project to Solimar.

Southeast Lost Hills is a shallow gas accumulation where four wells have already been drilled by Nuenco and its partners, with wells on the northern end of the block cased and perforated.

All wells encountered hydrocarbon shows in the Pliocene section but not all were tested.

Further log analysis by Nuenco identified multiple zones of interest and there will be proper testing of these numerous intervals over the coming months.

Through the work done to date by Nuenco and its partners, it is believed there is potential for a substantial gas accumulation in the shallow Pliocene reservoirs.