Australia’s Pancontinental Oil & Gas NL’s confidence that it is onto a major gas play in the US has grown following further assessment of results from the recently completed Tulainyo 2-7 gas appraisal well.
Pancontinental CEO John Begg said evaluation of the well data has given the company increased confidence that a large section of interest is gas saturated and sandstone reservoirs of sufficient quality to support commercial scale flows of natural gas are present.
“We still need to prove this via flow testing and will have more to say about the test programme once finalised,” Mr Begg said.
“From the outset we have viewed this as a potential play opening well. If we are successful with the test programme, we have a real shot at proving up at Tulainyo what Pancontinental believes has potential to be the largest new, conventional gas project in California in many years”.
After being drilled to a total measured depth of 5,710 feet (1740.4 m) the Tulainyo 2-7 well has been cased and suspended and preparations are underway to return to site with a gas production testing unit.
Detailed analysis of the well data has been conducted for the primary section of interest within the Early Cretaceous Lodogo Formation. The analysis indicates multiple stacked sandstone units, varying as expected in thickness and quality, that are all gas saturated. The well encountered gross sandstone reservoir thicknesses of up to 118 metres (386 feet) with estimated, net gas pay of 56 metres (183 feet). Higher quality reservoir units exhibit porosities ranging from 15%-20%.
The Tulainyo project is located on the wests flank of the Sacramento Gas Basin approximately 120 km northeast of Sacramento. It is held under leases covering some 40,000 net acres (152 km2) positioned just 8 km from a major gas transport trunkline that supplies gas from Canada into the enormous California domestic gas market. California consumes on average some 7 Bcf of gas per day (2.6 TCF gas per year) and up to 11 Bcf of gas per day during peak periods. Gas prices attract a premium to the USA benchmark, Henry Hub pricing.
The Tulainyo joint venture includes operator California Resources Production Corporation (“CRPC”), a subsidiary of a NYSE-listed company that is one of California’s largest oil and gas production companies and Cirque Resources LP, a private company based in Denver, Colorado.