The package includes two mature, multi-Tcf gas prospects, ‘Dempsey’ and ‘Alvares’ and an Area of Mutual Interest (the “Dempsey Trend AMI”) extending to approximately 250,000 acres that includes at least three already identified, large Dempsey-style follow up prospects.
Dempsey is a large structure mapped with 3D seismic and interpreted by Sacgasco to have the potential to hold a prospective resource of over 1 Tcf of gas in up to seven stacked target reservoirs. Aside from compelling technical merit, the Dempsey-1-15 well location sits next to existing gas metering and surface infrastructure that is owned by the joint venture. This will allow for any gas discovery to be tested and connected into the local pipeline at relatively low cost and in an accelerated timeframe. This early potential for short-term cash flow in the event of a commercial discovery would be significant for the joint venture and for the state of California where gas demand is high and approximately 95% of consumption is imported from other states. Gas produced in the Sacramento Basin attracts a premium to Henry Hub Gas Prices.
The joint venture has recently completed drilling a 2,970 metre (9,747 feet) combined appraisal & exploration well; Dempsey-1-15, to evaluate this prospect. Wireline logs confirmed numerous zones for production testing.
Alvares is a large structure mapped with 2D seismic and interpreted by Sacgasco to hold prospective resources of over 2 Tcf estimated potential recoverable gas. A well drilled by American Hunter Exploration Limited in 1982 for deeper oil intersected 5,000ft of gas shows. No valid flow test was conducted due to equipment limitations and the deeper oil target failing. However minor gas flows to surface were recorded even with these limitations. The possibility of using the existing well bore to sidetrack and get a valid flow test, thus reducing costs will be examined.