The following is an extract about Paloma from a Neon article by...

The following is an extract about Paloma from a Neon article by Oilbarrel.com

"....the real news of the six month period comes from its exploration activities. These include the Paloma Deep discovery in California’s San Joaquin Basin. This was a high risk well, with a pre-drill unrisked resource estimate of 300 million barrels of oil equivalent, and was described by analysts as a “long shot with significant shale potential”.

Initial results were certainly very encouraging but, disappointingly, the all-important testing programme has been thwarted by mechanical issues and sand ingress. The well found eight hydrocarbon bearing zones, including three unconventional oil shales. In all, the well found some 1,000 feet of potential hydrocarbon pay, including more than 200 feet in the Lower Stevens sand, which on its own could be a significant resource, 350 feet of the Lower Antelope Shale and 310 feet of the Fruitvale Shale, which is reckoned to be some 1,300 feet thick at this location.

The first two zones to be tested, the Fruitvale and Lower Stevens, flowed up to 226 barrels of oil/condensate per day and 1.9 million cubic feet per day of gas – potentially commercial rates from an unstimulated well, which looks very encouraging for the future. This test was cut short, however, because of the mechanical problems and the company is now testing the shallower zones in the well (there are plans for another Paloma Deep well in Q2 2012 to test the Fruitvale and Lower Stevens formations). Neon has a 75 per cent working interest in the well alongside farm-in partner Solimar Energy with 25 per cent, which is bearing 31.25 per cent of the drilling costs to earn its equity."