paris valley reserves size, page-3

I have copyed and pasted someone elses post from another website SS. To that person please forgive me but I think that this is an excellent post.


From the various data Neon/Salinas has published and the original data from the government authority DOGGR, we are looking at up to 132MB oil in place. Neon conservatively estimated a recovery rate of 30-35%. Similar heavy oil fields in the vicinity and California in general, are recovering at up to 65% of the OIP resource.

More appraisal drilling will be needed to fully confirm the OIP estimate and no doubt this will be part of Neons 5 well programme at PV this year.

Fridays announcement regarding high permeability and oil that is less viscous than expected suggests the recovery figure will exceed Neons prelim recovery figure. This should ultimately reflect in a higher flow rate as well.(with thermal recovery)

It seems to me we could be looking down the barrell of 46MB recoverable heavy oil. Even allowing for storage facilities, production facilities, steam injection, heavy oil dscount etc this would be a company maker for Neon.

Risks seem to be mainly in estimating the OIP figure and determining that the good field characteristics announced on Friday are typical over the target area(s). Production risk will remain until initial production testing takes place however I doubt this risk is high given the data sets available( new and historic.) 65% of California oil production is from heavy oil so methodology for its extraction is a widely known and resolved art.

Right now its something of a lottery to guess a recovery figure but theres no doubt we are now looking at a junior oiler that has components in place that could lead to a major re rating.

We only need 3.5 MB in certified 2P reserves to double the company size and as we can see from the figures above the potential is multiples of 3.5MB.

I think this will be quite exciting in the weeks to come.

At least we have a very important milestone to come in that the company expects to book reserves before the end of this financial year(ie 30/6/2010). I believe this will be a partial field figure with the remaining appraisal wells adding to the recoverable barrels as data is assessed.


Quickly looking at the new horizontal well at NSA. This could be quite a boost to cashflow. Previous horizontal wells have flowed up to 1000bopd, settling at around 500bopd before natural decline. So being conservative I would think they could run at an average production rate close to 250bopd for 24 months or so.