Sacramento Basin-focused natural gas developer and producer, Sacgasco Limited (ASX: SGC) (“Sacgasco” or “the Company”) provides this operations update on its activities in the Sacramento basin, onshore California.
Alvares Appraisal Project:
Following the successful transfer of responsibility for the Alvares wellbore to Sacgasco, regulatory approval to test the interpreted over-looked natural gas in the Alvares-1 well has been obtained.
The initial task is to test the integrity of the existing casing, then log through the casing to select perforation zones; and then test various zones of gas saturated reservoirs in the well. Consistent with good oilfield practice and for evaluation efficiency, we have designed the program with flexibility to respond to the results of testing.
The Alvares well had a drilled section of over 5,000 feet of high pressure gas shows which were not fully evaluated at the time of drilling due to the oil focus of the operators. The Alvares-1 well is one of only three on-structure wells in the under-explored part of the Northern Sacramento Basin that flowed pipeline quality natural gas to the surface on test. At Alvares, the flow stage of the open hole test in the Stoney Creek Formation failed almost immediately as the test equipment in the well bore was dislodged by high pressures.
The two wells that drilled significant portions of the Stoney Creek Formation – James-1 (1947) and Alvares-1 (1982) flowed natural gas to surface from Stoney Creek reservoirs when oil was the commercial focus.
Under the revised program, the well bore will be assess for its suitability for directly flow testing various gas saturated reservoirs interpreted from petrophysical and mud logs, and seismic in the Alvares well.
As previously announced, Pancontinental Oil & Gas NL subsidiary, Bombora Natural Energy Pty Ltd has executed an agreement to fund 50% (up to US$200,000) of drilling and pressure testing costs to assess the previously plugged Alvares-1 well bore integrity prior to planned flow testing.
State-of-the-art through-casing gas detection logs, and high penetration perforating tools are planned to be utilised for the testing.
Working Interests in the Alvares Gas Project:
Subject to satisfaction of various previously announced Farm-in earning terms, the working interests in the Alvares Gas Project are:
Sacgasco Limited (ASX: SGC) (Operator) 39%
Empyrean Energy PLC (LON: EME) 25%
Xstate Resources Limited (ASX: XST) 21%
Pancontinental Oil and Gas NL (ASX: PCL) 15%
The Dempsey 1-15 well is the first deeper well in the eastern area of the Northern Sacramento Basin to be based on 3D seismic. For the first time in 100 years of exploration in the Sacramento Basin, natural gas has flowed to sales from older, under-explored sediments. Extensive gas shows over 5,000 feet of sediments demonstrate gas charged systems with characteristics similar to productive Basin Centred Gas systems in other basins.
Moreover, the seismic data demonstrates multiple opportunities for improved reservoir development away from the Dempsey well bore.
Following the previously announced recommencement of gas production from the Dempsey1-15 well, some water accumulated in the well bore and reduced gas production. Production of gas from the Dempsey well has been shut-in temporarily for pressure build-up as a means to clear water from the well bore before recommencing gas production.
Working Interests in the Dempsey Gas Project:
Sacgasco Limited (ASX: SGC) (Operator) 50%
Empyrean Energy PLC (LON: EME) 30%
Pancontinental Oil and Gas NL (ASX: PCL) 10%
Xstate Resources Limited (ASX: XST) 10%
Sacgasco Managing Director Gary Jeffery commented:
“We are pleased to be moving ahead on several fronts in the Sacramento Basin as we have multiple opportunities to add value. This includes testing Alvares, working over existing wells in our 27-well portfolio to increase production, acquiring new assets that are under consideration, and drilling new wells.
“Alvares is a great opportunity that we have been working on for a long time and we are looking forward to commencing the testing program early in the October-December Quarter.
“Sacgasco has only scratched the surface of the Sacramento Basin. We are proving up the components of a vertically and horizontally extensive set of gas saturated rocks that have attributes pointing us to conventional reservoirs in under-explored Basin Centred Gas accumulations.
“In the next few weeks we expect to publish more details on the Alvares Project and further explain why it is different from, but complementary to recent exploration and appraisal activities.
“The Alvares-1 well has previously flowed pipeline quality gas to the surface from the targeted reservoir formation, and the Alvares Project is part of a potentially huge natural gas resource.
“Sacgasco is relentlessly pursuing multiple pathways to expand natural gas production with a number of initiatives now underway.
“We look forward to providing our shareholders with further and regular news in the multi-dimensional natural gas production growth initiatives in the Sacramento Basin.”