Tri-Valley Corp., Bakersfield, Calif., (Amex: TIV) reports its Lenox Ranch Lease No. 109-H horizontal oil well has successfully set casing at its pre-determined vertical depth, in preparation to make the turn for a horizontal bore into the Upper Vaca Tar Sands formation of the Oxnard, California oilfield.

Tri-Valley intends to develop the lease with at least 10 such wells for production and ultimately drill several injector wells for continuous steaming to heat up the tar-oil sands for ease of production and high recovery.

During the past year, Tri-Valley has successfully drilled seven other horizontal oil wells on the Hunsucker Lease, just north of the Lenox Ranch Lease and it has been expanding the facilities there to accommodate much larger production capacity than initially thought possible.

Tri-Valley president and chief executive F. Lynn Blystone says, “With sufficient heating cycles, all these wells can flow at least 500 barrels of oil per day. Of course, this requires commensurate expansion of every aspect of the field infrastructure from natural gas supply to fuel the steam generators, to treatment and processing equipment and storage facilities. Ultimately, we will drill companion injector wells that enable continuous steaming for continuous production. Once all the said infrastructure is in place, our production rates will achieve maximum capacity.”

Tri-Valley is also in the final stages of steaming the first grouping of 19 existing vertical wells drilled by a prior operator on the same Lenox Ranch Lease, with the goal of returning them to full production. The new horizontal wells are expected to produce several times the output of oil per day than do the vertical wells. All the remaining vertical wells will be re-worked to enable them to be steamed to add to the productivity of the lease.

Tri-Valley has oil and gas operations in California.