SOURCE: Tri-Valley Corporation

August 05, 2005 13:48 ET

Tri-Valley Commences Operations on Second Stage Frac of Ekho Well

BAKERSFIELD, CA -- (MARKET WIRE) -- August 5, 2005 -- Tri-Valley Corporation (AMEX: TIV) announced its subsidiary, Tri-Valley Oil & Gas Co., has commenced operations to perform a second stage hydraulic fracturing of the Santos Shale, an approximately 500-foot hydrocarbon saturated interval between 17,500 and 18,000 feet in the Company's Ekho No. 1 well some 45 miles northwest of its Bakersfield, California headquarters.

A key consideration is that the Ekho No. 1 is only 2,200 feet away and 300 feet up dip from the Great Basins Petroleum 31X-10, drilled in 1973, which temporarily flowed 1,000 barrels per day through a crack in 300 feet of lap cement before down hole problems forced abandonment. After further study, it is now thought the oil in the 31X-10 may have come from the Santos Shale.

The Ekho No. 1 includes four separate formations below 13,000 feet totaling approximately 2,500 feet of zones, all of which contain copious amounts of oil and gas locked up in tight sands and shales, and Tri-Valley has undertaken the engineering challenge to extract that petroleum treasure for its drilling partners and shareholders.

In February, Tri-Valley performed California's deepest hydraulic fracture when it frac-ed the Ekho's Vedder Sand between 18,000 and 18,500 feet. Performed by Schlumberger, the frac job exceeded Tri-Valley's expectation by extending as far as 1,500 feet from the well bore. However, commercial permeability was not encountered and, as previously advised, Tri-Valley will now go up hole to fracture the next pay zone now that the Company is confident of the mechanical viability of its frac design.

In order to preserve the ability to return to the Vedder at a later date when more knowledge and technology are available, Tri-Valley will merely suspend operations on that oil rich zone rather than abandon it while it works on the Santos Shale and other prospective up hole formations.

"Tight formation plays like the massive Barnett Shale play in Texas have typically required persistence after discovery to reap the rewards. Because we know the high-quality oil and gas is profusely present in the tight intervals in our Ekho play, it follows that we should persevere in processing these zones to commercial status," said Joseph R. Kandle, president of Tri-Valley Oil & Gas Co., generator of the Ekho play and operator of the well.

The Ekho No. 1 was drilled to 19,085 feet in record time in 2000 but the Vedder Sand would not yield oil and gas at commercial rates. The Company embarked on a lengthy search of data on comparable wells worldwide without finding an analog. Intermittent testing convinced Tri-Valley that the formations could be successfully fractured and Schlumberger's ultra high-pressure unit and crew did just that in the Vedder Sand. However, rather than re-frac the Vedder at this time, Tri-Valley has chosen to frac the up hole shale sequence, which may have more natural fractures already in place around the borehole. Proliferating these fractures may result in commercial flow rates of the contained oil.

Meanwhile, Tri-Valley continues to expand its research on the Vedder and other tight sands in the area which are estimated to hold billions of barrels of high-quality oil and gas.

"The consuming public is being treated to a classic example of exploration which involves significant investor and corporate risk, and these kinds of projects call forth the best talents of the industry to obtain increasingly precious domestic reserves as we are doing, and we expect exceptional, if not bonanza, rewards for our drilling partners and shareholders when we achieve success in this endeavor," said F. Lynn Blystone, president and chief executive officer of Tri-Valley Corporation.

Tri-Valley Corporation is in its 43rd year of business as a successful operating company and for 32 years has been a full reporting 12 (g) publicly traded Delaware Corporation. Tri-Valley Corporation stock is publicly traded on the American Stock Exchange under the symbol "TIV" in the United States and is also traded in Europe on the Frankfurt Stock Exchange under the symbol "TVC WKN 911919." Our company websites, which include all SEC filings, are www.tri-valleycorp.com and www.tri-valley.de.

This press release contains forward-looking statements that involve risks and uncertainties. Actual results, events and performance could vary materially from those contemplated by these forward-looking statements which include such words and phrases as exploratory, wildcat, prospect, speculates, unproved, prospective, very large, expect, potential, etc. Among the factors that could cause actual results, events and performance to differ materially are risks and uncertainties discussed in the company's quarterly report on Form 10-Q for the quarter ended March 31, 2005, and the annual report on Form 10-K for the year ended December 31, 2004.

Contact Information

  • Contact:
    F. Lynn Blystone
    President & Chief Executive Officer
    800-579-9314