Tri-Valley Corporation (NYSE Amex: TIV) today announced that it has completed an expanded Phase 1 development drilling program at its Claflin oil project, located in the Edison Oil Field near Bakersfield, California. The Company has drilled eight new wells, up from the six wells initially planned. These new wells are part of Tri-Valley’s overall plan to drill a total of 22 new wells at Claflin during 2011 to convert 2.1 million barrels of net proved undeveloped oil reserves (“PUDs”) on the property to proved developed and producing (“PDP”) status and to increase oil production. The net proved undeveloped reserves were included in the reserves disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, and filed with the U.S. Securities and Exchange Commission on March 22, 2011.
Tri-Valley is currently completing the installation of well-site production equipment and tie-in of the new wells to existing production facilities at Claflin. The Company expects to commence an initial steam injection cycle on the first well in early May and that the new wells will have received an initial steam injection cycle by the end of July; however, new steam generating capacity being installed at Claflin could accelerate completion of this initial steam injection work on the new wells. First oil production is anticipated from some of the new wells by June. Following first production from these new wells, there will be a 90-day evaluation period during which Tri-Valley will analyze the performance of the new wells prior to commencement of the second phase of the Claflin development to complete the remaining 14 new wells by the end of the year.
“We are ahead of schedule on our plans to develop the Claflin property to drive increased oil production in 2011,” said Maston N. Cunningham, President and CEO of Tri-Valley Corporation. “Our plan calls for a total of 13 new vertical wells and nine new horizontal wells to be drilled on the property this year. If we are successful, we expect to exit 2011 with gross daily production of about 800 barrels of oil from the property.”