Company Provides Operational Update for Monterey County Oil Producing Assets
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An analysis of Trio Petroleum Corp's recent operational update reveals a strategic focus on enhancing oil production in Monterey County. The stabilization of production rates at 75 barrels per day (BOPD) across their assets signifies a modest but consistent output. The Monterey Formation's significance as a major oil and gas producing zone in California underscores the potential for these assets. However, the production figures reported are relatively low compared to larger industry players, which may limit the impact on the company's market performance and valuation.
Furthermore, the company's intent to invest in low-cost methods to increase production is a prudent approach, potentially improving margins without substantial capital expenditure. The estimate of up to 50 additional development well locations at Presidents Field suggests a long-term strategy for growth, but investors should be cautious as the actual realization of these wells and their production capacity remains speculative until further development occurs.
From a technical standpoint, the HV-3A well's production without the need for steam due to the favorable viscosity of the mid-gravity oil is a positive operational aspect. The ability to produce oil with simpler extraction methods can reduce costs and environmental impact. The company's plan to perforate up to 650 feet in the currently producing oil zones and to explore deeper behind-pipe oil zones indicates a methodical approach to enhancing production. However, the effectiveness of these interventions, such as acidizing for borehole cleanup, will depend on the geological complexities of the Monterey Formation.
It is also worth noting that the peak production of 154 BOPD at HV-3A well during its initial test period was substantially higher than current levels. This raises questions about the well's long-term productivity and the potential for decline rates that may affect future output.
Environmental considerations are increasingly important for energy companies and Trio Petroleum Corp's operations in California, a state with stringent regulations, are no exception. The absence of steam injection in the HV-3A well's production process reduces the environmental footprint and complies with the state's regulatory framework. This compliance not only mitigates legal and reputational risks but may also provide a competitive advantage in an industry facing increasing environmental scrutiny.
Investors should be aware that any future expansion in drilling and production will be closely monitored by regulatory bodies and Trio's ability to maintain compliance while scaling up operations will be critical to their continued success.
Combined Oil Production Stabilized at 75 Barrels Per Day
Bakersfield, CA, April 11, 2024 (GLOBE NEWSWIRE) -- Trio Petroleum Corp (NYSE American: “TPET”, “Trio” or the “Company”), a California-based oil and gas company, today provided an update on its oil producing assets in Monterey County, California, including at the Presidents Field (“Presidents”) of the South Salinas Project and at the McCool Ranch Field (“McCool Ranch”).
“We are pleased to provide this operational update on our two oil producing assets in Monterey County,” commented Michael Peterson, CEO of Trio Petroleum. “The Company currently operates two highly promising, proven petroleum assets in Monterey County in the Presidents Field and the McCool Ranch, and we are very encouraged by our recent operational results at both fields.”
“Bringing these wells back online and taking the necessary steps to permit permanent production sets the stage for an expanded drilling program in these fields. We correctly identified these assets from a geological perspective, we drilled successful multiple test wells. Now we want to take the logical next steps in extracting value from these assets.”
Presidents Field
On March 26, the Company brought the HV-3A well in the Presidents Field back into full-time production. Oil production on this well has stabilized at an average production rate of 30 barrels of oil per day (BOPD). This well was previously drilled and completed by the Company as a test well in 2018 and was initially production-tested for 37 days. During this period, peak production was 154 BOPD, with average production of 33 BOPD.
This well is producing from 125 feet of perforations in the Yellow Zone, which is also commonly referred to as the Yellow Chert, and from an additional 125 feet of perforations in the overlying Upper Monterey Clay. These are both oil producing zones commonly found within the broader Monterey Formation. The Monterey Formation is one of California’s major oil and gas producing zones.
Operations at HV-3A do not require steam due to the favorable viscosity of the mid-gravity oil. Based on the Company’s production analysis, Trio believes that production at HV-3A can be significantly increased relative to current and previous levels through several low-cost investments. Two examples of these investments are:
1) to perforate an up to 650 feet in the currently producing oil zones,
2) opening deeper behind-pipe oil zones that are already perforated, acidizing the well for borehole cleanup, and other methods and operations under consideration.
The Company will produce and monitor these baseline production levels as currently completed for the time being and take steps to increase production when appropriate. Based on prevailing well spacing practices in adjacent fields, our geological team estimates that there are up to 50 additional development well locations at Presidents, assuming 40 acre well spacing.
McCool Ranch Field
As a separate update, the Company continues to monitor the HH-1 Well in the McCool Ranch which is continuing to produce approximately 45 BOPD. Based on this positive data, the Company has taken further steps to bring additional shut-in oil wells in this field back online. The 35X well was returned to production end of last week, and Trio’s production team expects to have stabilized production data for this well within two weeks. Lastly, the 58X well received a heat treatment this week, and is in the final stages of being brought back into full-time production.
In summary, the Company currently has three actively producing oil wells, two at McCool Ranch Field and one at Presidents Field. The HH-1 well at McCool Ranch and the HV-3A well at Presidents Field are collectively producing about 75 BOPD. This daily oil rate is expected to increase shortly as the 35X and 58X wells at McCool Ranch resume full time oil production in the immediate near term.
Additional information is provided on TPET’s website at the following link: https://trio-petroleum.com
About Trio Petroleum Corp
Trio Petroleum Corp is an oil and gas exploration and development company headquartered in Bakersfield, California, with operations in Monterey County, California, and Uinta County, Utah. Trio has a large, approximately 9,300-acre asset called the “South Salinas Project” in Monterey County, California, where it owns an
Cautionary Statement Regarding Forward-Looking Statements
All statements in this press release of Trio Petroleum Corp (“Trio”) and its representatives and partners that are not based on historical fact are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Acts”). In particular, when used in the preceding discussion, the words "estimates," "believes," "hopes," "expects," "intends," “on-track”, "plans," "anticipates," or "may," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Acts and are subject to the safe harbor created by the Acts. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of the Trio's control, that could cause actual results to materially and adversely differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth in the Risk Factors section of the Trio’s S-1 filed with the Securities and Exchange Commission (SEC). Copies are of such documents are available on the SEC's website, www.sec.gov. Trio undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.
Investor Relations Contact:
Redwood Empire Financial Communications
Michael Bayes
(404) 809 4172
michael@redwoodefc.com
FAQ
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