Since production started at North San Ardo, the Lombardi 1-27 well has produced consistently at more than 100 barrels per day, according to managing director John Begg.

“This is an excellent result for a vertical well producing a heavy crude stimulated only by hot water injection,” he said.

“We are very pleased that the company has joined the ranks of oil producers in such a short time and we are looking forward to a successful drilling program at North San Ardo to demonstrate our operating capability and significantly increase our production levels.”

Production from the well is currently being achieved using temporary facilities and is constrained by onsite strage capacity of just 3000 barrels, which has enforced periodic shut-ins.

Perth-based Salinas is currently fabricating fit-for-purpose facilities, including a generator for steam injection, to bring the field into permanent production immediately after the completion of a forthcoming drilling program. The drilling would begin as soon as a contracted drilling rig had arrived, Begg said.

The next phase of drilling is expected to include horizontal production wells.

Windgap a duster

Meanwhile, testing operations of at Salinas’ Windgap 42-36 well have been completed without resulting in a commercial flow of hydrocarbons.

The company said it did not think a second well on the project was warranted, which would otherwise be required by the governing acquisition agreement.

Salinas said it would now withdraw from the various agreements and two associated lease areas.

“Although disappointed in the results of the well, we have made a clear-cut decision to exit this project and we will now be able to focus attention on our other prospective leases in the San Joaquin Basin, confident of our operating ability to drill and evaluate challenging wells,” managing director John Begg said.

Salinas holds a 42.5% stake in the Windgap project, while Statesman Resources has 21.25%, Laris Oil & Gas 15%, Transerv Australia 12.75% and Solimar Energy 8.5%.

Meanwhile, the company said all zones of interest in the North Yowlumne 1-26 well have now been tested and at this stage it is yet to be completed as a commercial producer.

Salinas, which is earning a 25% interest in the well, said it is shut-in pending a recommendation about the future of the program by the operator.