Solimar Energy Limited
TSX VENTURE : SXS
ASX : SGY

Solimar Energy Limited

October 15, 2012 05:00 ET

Solimar Commences Oil Production at Kreyenhagen Field, California

MELBOURNE, AUSTRALIA--(Marketwire - Oct. 15, 2012) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Solimar Energy (TSX VENTURE:SXS)(ASX:SGY) is pleased to provide the following update on ongoing production testing operations at the Company's 100% owned Kreyenhagen shallow oil field redevelopment project in the San Joaquin Basin, California.

  • Initial, ongoing production testing confirms shallow Temblor heavy oil resource, encouraging unstimulated flow rates, and better than expected oil gravity and viscosity profiles.

  • Testing of the Temblor Sandstone at 850 feet depth in the 4-33 well achieved a stable rate of 4 bopd (40% water cut) following a maximum initial rate of 15 BOPD.

  • Sampled oil gravities of 14.6°-17.3° API with correspondingly lower than anticipated viscosity values increases opportunities for selective commercial primary production in conjunction with a more efficient steam enhanced production development.

  • Forward plans include further zonal production testing in current wells, testing one additional well, and stimulation of one or more wells. Concurrently, acceleration of primary production in selected zones via horizontal wells and the drilling of on trend appraisal wells are being investigated.

Kreyenhagen Field 4-33 and 1-33 workover well results

The 4-33 and 1-33 wells, which were drilled in 2007, were re-entered for production testing of the untested Temblor Sandstone oil reservoir. The wells have confirmed the presence of an intra-Temblor zone containing favorable reservoir and oil attributes. Following an initial rate of 15 BOPD, the 4-33 well is producing at a stabilized pumped rate of 4 BOPD from 140 net feet of perforations between 850 feet and 1,030 feet. Sampled oil gravity in 4-33 is 17.3° API, which is at the high end of expectations with a correspondingly favorable viscosity profile. The 1-33 well reached a stabilized pumped rate of 2 BOPD (15.5° API) with 80% water cut from 100 net feet of perforations between 660 feet and 840 feet. The well is currently being recompleted to isolate the Temblor upper zone perforations for further zonal testing and stimulation.

Forward plans

Further zonal production testing is progressing in the 4-33 and 1-33 wells with plans to stimulate one or more of the wells, and to test the 2-32 well. It is anticipated that up to three field step-out wells could be drilled and tested to further extend the discovered resource within the preexisting defined field boundary. This is to be followed by a cyclic steam production test program anticipated to begin in Q1 2013.

The Company will provide further update announcements as and when new information and results become available.

ABN 42 112 256 649

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