California Oil & Gas Corp., Calgary, (OTCBB: COGC) reports that, along with partners Daybreak Oil and Gas Inc., Spokane, Wash., (OTCBB: DBRM) and Consolidated Beacon Resources Ltd., Vancouver, (TSX: KBC), its first well in a four-well program in the San Joaquin Basin has been drilled and the second well, Olancha #1, began drilling Dec. 3.
The Sunday #1 well was drilled to a total depth of 3,065 feet, encountering approximately 24 feet of oil pay in the Vedder formation. The well, located in the East Slopes Prospect near Bakersfield, Calif. Oil produced from the well will be sold to Chevron U.S.A. Inc.
In addition, drilling has begun on the Olancha #1 well, the second in the four-well program. Chevron will have a 50% working interest in the wells after drilling, while California Oil & Gas will have a 12.5% working interest.
Daybreak will have a 25% working interest. Beacon will have a 12.5% interest before payout and a 6.25% interest after payout.
California Oil and Gas president John McLeod says, "The success of the Sunday #1 well bodes well for further exploration in the area. The San Joaquin Basin has been a very prolific oil producer, but until now, the area of the AMI had not been explored with modern seismic techniques. The high quality seismic program acquired in late 2007 identified over a dozen potential exploration prospects."
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