ABN 42 112 256 649566 El izabeth St reetMelbourne Victor ia...

ABN 42 112 256 649
566 El izabeth St reet
Melbourne Victor ia 3000
Tel : +61×3×9347×2409
Fax: +61×3×9349×1186
www.sol imarenergy.com.au
5 December 2007
Manager Announcements
Company Announcements Office
Australian Stock Exchange Limited
10th Floor, 20 Bond Street
SYDNEY NSW 2000
Via electronic lodgement
Successful Commencement of Testing at Southeast Lost Hills
Solimar Energy Limited (“Solimar Energy�) (ASX Code: SGY) is pleased to announce the
successful commercial testing of operations which commenced at the Jack Hamar 3-13 well at the
Southeast Lost Hills Project (SELH) in the San Joaquin Basin in California. Solimar Energy’s
wholly-owned US subsidiary, Livingstone Energy, Inc. (Livingstone) is Operator in a joint venture
with Nuenco NL. Southeast Lost Hills is a shallow gas accumulation where four wells have already
been drilled.
The Jack Hamar 3-13 well flowed gas at three sustained production rates of 300,000 cubic feet per
day (cfpd), 450,000 cfpd and 633,000 cfpd over a 48 hour testing period. The longest test period
was at 633,000 cfpd with a tubing pressure of 1,185 psi on a 6/64 inch choke. Livingstone is
planning to recomplete and test the other three wells (Jack Hamar 1-12, 1-13 and 2-13) in this
prospect area within the next few months. The gas from the commercial wells will be transported
through the Joint Venture owned pipeline for sale in to the local energy market. The Joint Venture
partners are in discussions with potential buyers of the gas.
The aim of testing the SELH operation is to confirm commercially viable production rates from
these wells and to better ascertain the reserves potential. Solimar Energy believes there is
potential for a substantial gas accumulation in the shallow Pliocene reservoirs. The commercial
development potential of the project is enhanced by strong gas demand in the area, abundant
infrastructure and high gas prices.
Southeast Lost Hills Project To Date
Under an earlier property agreement with Orchard Petroleum, Livingstone acquired a 50% interest
in the Block B lease at Southeast Lost Hills Project (San Joaquin Basin), including Jack Hamar
wells, 1-13, 2-13, 3-13 and 1-12 and the uncompleted pipeline. Livingstone is now the Operator of
this project, with the other 50% held by Nuenco NL.
Four shallow gas wells have been drilled and completed to date on the northern end of the block.
All wells encountered hydrocarbon shows in the Pliocene section but not all were tested. The Jack
Hamar wells encountered gas over numerous intervals and an extensive testing operation is
planned over the coming months.
About the Southeast Lost Hills Project
SELH is located in the San Joaquin Basin, along the southern flank of the large Lost Hills Anticline.
The Lost Hills structure is a large feature that has already produced in excess of 400 million barrels
of oil equivalent (“MMboe�) to date to the north of the Jack Hamar discovery.
The SELH gas accumulation is a combination structural stratigraphic trap (see diagram below).
The reservoir targets are shallow Pliocene sands that pinch out around the flanks of the Lost Hills
Anticline. Seismic amplitude anomalies are associated with the presence of these hydrocarbons.
This is a shallow play, with target depths of not greater than 4,000 feet, hence the commercial
development costs will be relatively low.
Southeast Lost Hills Project Showing Jack Hamar Gas Wells
Source: Nuenco NL. (Note that Solimar Energy Limited and its wholly-owned US subsidiary, Livingstone
Energy Inc., do not have an interest in the Jack Hamar 1-1 well).
Strong Commercialisation Potential
The Californian market demand for gas is very strong and in the event that production testing
proves commercial, Solimar is confident that gas production can commence in a rapid fashion.
Solimar has been in discussions with numerous parties to acquire its gas and has been planning
its commercial development. SELH is a low cost shallow gas play that is close to infrastructure
and has good commercial potential.
Yours sincerely
Frank Petruzzelli
Chairman
Solimar Energy Limited
For further information please contact:
SOLIMAR ENERGY LIMITED
Registered Office:
566 Elizabeth Street, Melbourne, Victoria 3000
Telephone: +61 3 9347 2409; Facsimile: +61 3 9349 1186
www.solimarenegy.com.au