HOUSTON, March 23, 2011 /PRNewswire/ -- Blast Energy Services, Inc. ("Blast") (OTC Bulletin Board: BESV) announced today that the Solimar Energy 76-3 well in the Guijarral Hills Field Area located in Fresno County, California has reached its total drilling depth of 10,550 feet. Upon reaching total depth, a series of wireline log evaluations were conducted which indicated the presence of at least four potentially commercial reservoir sands that are expected to undergo further testing. Solimar Energy, the operator of the well, plans to set casing immediately and then will commence production flow testing procedures.
"We are encouraged by the shows encountered in this well especially in light of the similarities to the zones in offset producing wells that were originally drilled fifty to sixty years ago. We are looking forward to the results from a flow testing program using modern completion techniques," stated Michael Peterson, acting President and Chief Executive Officer of Blast.
Preliminary analysis of the wireline data shows hydrocarbon potential from the well's main reservoir targets in the Allison, Leda, Lower Avenal and Lower Gatchell Sandstones. A more complete evaluation of the wireline data with further reference to the offset well data will be carried out to determine how many zones will be tested and over what intervals. The flow testing program will be conducted to determine whether the potential pay zones have sufficient saturations of hydrocarbons with the capacity to flow at commercial rates. Such tests will also provide more definitive information on the gravity of the hydrocarbons as the initial indications showed the presence of light oil - up to 40 API gravity crude oil - in some of the zones.
Each of the main reservoir targets was confirmed at close to the predicted depth with formation tops and thicknesses as follows:
Top 8,060 feet
Thickness 35 feet
Potential hydrocarbon pay 10-20 feet
Top 8,518 feet
Thickness 12 feet
Potential hydrocarbon pay 8 feet
Top 9,930 feet
Thickness 80 feet
Potential hydrocarbon pay 27 feet
Top 10,373 feet
Thickness 12 feet
Potential hydrocarbon pay 5-6 feet
These zones also compare similarly in thickness, permeability and porosity to offset wells located in the nearby Guijarral Hills Field that had initial production rates of over 100 barrels per day from each zone.
In addition to the above zones, which were the original targets, a number of other zones were identified and created great interest. These zones will be examined further to determine whether the data indicates the presence of hydrocarbons and whether these zones should be included in the flow testing program.
The casing operations are likely to take approximately five days. Once the casing has been run, the drilling rig will be released from the well site and a smaller testing unit will be brought on location to commence the flow testing program. Such testing units are readily available as the well site location is very near the city of Bakersfield, which is the main oil services center in the San Joaquin Valley.
Under the terms of the farmout agreement with Solimar, Blast will participate in the Guijarral Hills project on a promoted basis of one-third for a quarter, or 66-2/3 percent (%) of the costs to drill and complete the initial well. After competition of the initial well, Blast will have earned a net revenue interest of 38% and a 50% working interest in the entire project's acreage position, subject to certain interests granted in connection with Blast's recent debt funding.
Located in the oil rich northwestern San Joaquin basin, the Guijarral Hills Field was originally discovered in 1948 and has produced over 50 million barrels of light oil with some natural gas over its lifetime. While the original field is largely abandoned today, Solimar has acquired an interest over three sections covering 2,543 acres. One of the sections, where the initial well is located, is an under developed area located between two previously highly productive fields and is within 2,000 feet of the Guijarral Hills Field. As the initial drilling location is considered "in-field", the environmental and surface use requirements have already been cleared and drilling has commenced. The balance of the acreage is primarily to the west and south of the existing field in areas that Solimar believes have been under developed.
Initial technical work previously conducted by Solimar focused on identifying those parts of the field extension likely to have been less efficiently exploited by the original drilling program from as far back as the 1940's. It is hoped that commercial flow rates and good recovery of the remaining in place oil can be re-established. Solimar has completed further geological and reservoir engineering studies on the project and the results have been very positive for the potential recovery of light oil.
Solimar is a wholly-owned subsidiary of Solimar Energy Limited (SGY.AX), a publicly-traded company on the Australia Stock Exchange based in Melbourne, Australia.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). In particular, when used in the preceding discussion, the words "believes," "expects," "intends," "plans," "anticipates," or "may," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act, and are subject to the safe harbor created by the Act. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. Forward looking statements involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to be materially different from any future performance that may be suggested in this release. Such factors may include risk factors including but not limited to: the likelihood that the customer lawsuits result in meaningful proceeds, the ability to raise necessary capital to fund growth, adequate liquidity to manage operations and debt obligations, the introduction of new services, commercial acceptance and viability of new services, fluctuations in customer demand and commitments, pricing and competition, reliance upon lenders, contractors and vendors, the ability of Blast's customers to pay for our services, together with such other risk factors as may be included in the Company's filings on its periodic filings on Form 10-K, 10-Q, and other current reports. Blast takes no obligation to update or correct forward-looking statements, and also takes no obligation to update or correct information prepared by third parties that are not paid for by Blast.
SOURCE Blast Energy Services, Inc.