Perth-based Salinas told the Australian Stock Exchange yesterday afternoon that it interpreted Wind Gap to be an extension of the North Tejon gas and oil field, from which about 229 billion cubic feet of gas and 23 million barrels of oil and condensate have been produced.
Wind Gap, which Salinas will operate, earning a 42.5% interest, had the potential to contain recoverable reserves of 60 bcf of gas and 6 million bbl of petroleum liquids.
“Drilling of Wind Gap marks a milestone in the development of our company. Not only does it increase our acreage in the Southern San Joaquin Basin to about 30,000 prospective acres, it will be the first operated well drilled by our new team,” Salinas managing director John Begg said.
“As such, it marks our transformation after just six months to a genuine, upstream oil and gas player.”
He said Salinas (formerly Renewable Energy) already had a potentially significant oil discovery at North Yowlumne and would also be drilling a multi-well program on its 100%-owned North San Ardo oil field in the coming months.
“Wind Gap is consistent with our strategy of having large equities and therefore high impact potential in our drilling programs and provides an excellent chance to establish early production.
“Additionally, although our overall focus is on oil targets, there are some strategic advantages to be gained through having gas reserves as well.”
He said the Kenai Rig #3 would drill the Wind Gap 42-36 well to a planned total depth of 12,500 feet (3810m). The well would have multiple targets in Oligocene to Eocene-aged sandstone reservoirs, all of which were producing in the North Tejon field. The dry hole cost of Wind Gap 42-36 was about $US3 million ($A4 million), with Salinas funding half that.
Production history for Wind Gap, a large anticlinal structure, compartmentalised by faults, showed that wells needed to be drilled in each structural compartment to effectively produce the reserves.
Wind Gap was located within Salinas’ area of focus in the Southern San Joaquin Basin, where the company was targeting conventional, sandstone reservoirs with strong flow rate potential. In the event of proven commercial reserves, there was available production infrastructure nearby.
Begg also said Salinas was in advanced negotiations regarding an additional lease ontrend with the Wind Gap Project, immediately adjacent to producing fields.
The Wind Gap partners will be operator Salinas Energy (42.5%), Statesman Resources (21.25%), Laris Oil & Gas (15%), Tejon Energy (12.75%) and Solimar Energy (8.5%).
