the plot thickens!

ANNOUNCEMENT TO THE AUSTRALIAN STOCK EXCHANGE: 16 FEBRUARY 2006
Forward Program for Testing of North Yowlumne ST-1 Well
Salinas Energy Limited advises that 4 ½ inch test tubing has been run and cemented in the North Yowlumne Sidetrack -1 well and the large Nabors 633 rig has been released.
After installation of a high pressure capacity (10,000psi) blow out preventer stack to ensure all potential down hole pressures can be safely managed, together with other necessary equipment, the well will be flow tested using a smaller, fit for purpose testing rig. Current indications are that the testing rig will be onsite within 2 to 3 weeks.
A decision to test was taken after acquiring a suite of electric logs which was limited by difficult hole conditions. The electric logs indicate that a thick sequence of sandstone units is present within the target interval exhibiting porosity and characterised by high resistivities on the logs, indicative of the presence of hydrocarbons.
Although a detailed test program has yet to be agreed, up to three separate zones will be tested for flow potential and hydrocarbon content, beginning at the base of the sequence.
Further details of the testing program will be released once the test program and schedule are finalised.
The well is testing a large oil prospect on the South Buena Vista lease area (in the San Joaquin Basin in California) in which Salinas Energy is earning 25.0%. The prospect has potential for a resource of over 100 million barrels of recoverable oil and is immediately adjacent to the 113 million barrel Yowlumne oil field.
Drilling of the prospect is consistent with the Company’s exploration strategy to focus on strong flow rate reservoir targets in prospects with substantial oil reserves potential.
Salinas is funding 50% of the cost of the well to earn its 25% interest. Partners in the South Buena Vista project are:
- NEG (Operator of the initial exploration well) 6.25%
- Ivanhoe Energy 56.25%
- Salinas Energy 25.0%
- Statesman Exploration 12.5%
Enquiries- Managing Director: John Begg
Contact Details: Telephone: 08 9322 6322
Facsimile: 08 9322 6558