CALIFORNIA'S NEXT MAJOR OILFIELD: PICO ANTICLINE PROSPECT
VANCOUVER, British Columbia, Jan. 6 /PRNewswire/ -- The following is being issued by Riva Petroleum Inc.:
Drilling of the Pico Anticline near Los Angeles, which began Oct. 15, 1991, has enormous ramifications for the enhancement of Riva Petroleum Inc. (Vancouver: RVA) oil and gas reserves. In the petroleum industry, a giant oil field is one that will ultimately produce in excess of 100 million barrels. The romance of the Pico Anticline lies in the extreme magnitude of the reserve potential: 625 million barrels of oil or 3.6 trillion cubic feet of gas. Unlike many wildcat attempts, there are numerous major oil fields within close proximity, including two supergiant fields that have reserves over 1 billion barrels of oil. The well will likely reach target depth of 16,500 feet by March, 1992.
Riva Petroleum Inc. is a Canadian-based company engaged in the exploration and acquisition of oil and gas properties located in Alberta, Louisiana and California. During 1990/1991 the company participated in the drilling of five wells, three of which were completed as oil wells. During February, 1991, Riva entered into an exploration joint venture led by Samedan Oil Corp., with the intent of leasing acreage and drilling on the Pico Anticline prospect, located in Los Angeles County, Calif. 2,400 acres of land were leased directly by a consortium and a further 3,000 acres were obtained via a farm-in agreement with Chevron, USA, in September 1991. The total area of mutual interest comprises approximately 13,000 acres. Samedan Oil Corp. is the oil exploration and production subsidiary of Noble Affiliates Inc. (NYSE: NBL), one of the nation's leading independent energy companies. During 1991 Riva committed most of its attention of its 22 percent working interest in the Pico Anticline prospect.
The Pico Anticline
The Pico Anticline is part of the Ventura Basin, a large synclinal basinal feature, which essentially encompasses all of the drainage area of the Santa Clara River. Particularly noteworthy of the Ventura Basin is the tremendous thickness of the Pliocene (geologically young) sediments, which may be the thickest in the world. Oil trapped in the Pliocene sediments, mostly Pico Formation, accounts for almost 70 percent of all Ventura Basin production.
The Sespe Formation, which is Riva's primary target, in concert with the Upper Miocene Formations, representing the secondary targets, accounts for over 500 million of the 2,000 million (2 billion) barrels of recoverable oil reserves already discovered in the Ventura Basin. Within the Ventura Basin is one supergiant oilfield -- Ventura Avenue -- which has produced over 900 million barrels. The onshore part of the Ventura Basin, which is only about 70 miles long and 20 miles wide, contains 50 oil fields.
Depending on drilling and production costs, commercial oil production can often be derived from only five to 10 feet of net pay. In contrast, the Sespe ranges in thickness up to an incredible 7,000 feet with about 50 percent of this capable of reservoir calibre. At the Sespe level, the anticlinal structure has an estimated area of closure of about nine square miles. While the Pico Anticline is also likely to be cut up by minor faulting, it is possible that the ultimate producing area may exceed that of the Ventura Avenue Field.
Locally, the Pico Anticline occurs in a very hydrocarbon prone area and it is surrounded by producing fields. The 75 million barrel Newhall Potrero Oil Field produces from a faulted anticline at depths of up to 15,000 feet only two miles north of Pico. The Aliso Canyon Field, with 55 million barrels of oil produced and more than 250 billion cubic feet of gas production to date, occurs in a fault trap only two miles to the south. The Placerita Field, with 45 million barrels of oil produced, is situated only four miles to the northeast.
Pico Canyon, on the north end of the Pico Anticline, was the site of the first commercial oil production in California. The most recent well drilled in the immediate area was the Celeron-Chevron Towsley No. 1, abandoned in early 1987 at a total depth of 15,816 feet. This well, which required six months to drill and cost in excess of $3,000,000 US, penetrated the northern flank of the fold but bottomed in the Topenga Formation, which occurs directly above the Sespe Formation. Information from this hole is key to current interpretation of the Pico Anticline's potential as it confirmed the closure of the structure at depth.
Celeron abandoned the well in July 1987 despite numerous oil shows. Dr. John Martin of Calgary, Alberta, became interested in pursuing exploration of the area believing the well had not properly tested the primary reservoir potential in the area.
Subsequently, Dr. Martin introduced his findings to Samedan Oil Corp., who are based in Ardmore, Okla. Samedan then brought in partners to form a new joint venture consortium. Samedan will remain the operator of the project.
To economize the current drilling program, Riva et al have re- entered the Celeron-Chevron well-bore and will whip-stock out near the 11,000 foot level. Because this well-bore is located on Chevron land, a farm-in agreement with Chevron was negotiated and signed in September 1991. The dryhole cost is estimated at approximately $3,500,000 US with a further $750,000 US budgeted for completion. The minimum total depth of the well will be approximately 16,500 feet. At this depth, the sespe should be about 2,000 feet thick. The nearest Sespe production stems from two fields, four miles west, that have cumulative production of 12 million barrels from slightly faulted structures.
Potential Oil Reserves
Assuming that 25 percent of the gross Sespe thickness is oil pay, there may be potential for oil volumes of up to 80 million barrels per square mile. Studies of the Sespe Formation from wellbores and outcroppings elsewhere in the basin suggest that up to 50 percent of the gross Sespe thickness may be reservoir quality sand. More than 1,000 feet of potential reservoir sandstone (2,000 feet of gross section) is expected at the first drilling location, but information from the Celeron well suggests that several thousand feet of closure are possible which may result in oil pays and recoverable reserves substantially greater than forecast.
If the entire estimated subsurface area of closure on the structure at Sespe level contains oil pay then very high volumes of recoverable reserves are possible. To put the magnitude of this well into perspective, the largest gas discovery in Canada during the last decade was the Caroline gas field operated by Shell Oil, with in excess of 1 trillion cubic feet of gas. The Pico Anticline could exceed this by a factor of three.
/CONTACT: Robert Grey, John Prevedoros or Bill Mallinson (investors) of Riva Petroleum, 800-667-1160; or Doug Lindeman (media) of Cottrell and Lindeman Associates, 213-936-6677, for Riva Petroleum/
(NBL RVA.) CO: Riva Petroleum Inc. ST: British Columbia, California IN: OIL SU: DSC CH -- NYON3 -- 6760 01/06/92 09:07 EST