Raven Energy (ASX: REL), formerly Magnum Gas & Power (ASX: MPE), has announced encouraging results from the Tulainyo 2-7 gas appraisal well in the Sacramento Basin of California, United States.
According to Raven’s 60%-owned subsidiary, Gasfields LLC, a joint venture partner in the project, evaluation of the well data has indicated multiple potential gas pay zones including up to 56 metres of estimated net pay in sandstones.
“We are now more confident that the entire section of interest is gas saturated and sandstone reservoirs of sufficient quality to support commercial-scale flows of natural gas are present,” Gasfields representative John Begg said.
After drilling to a total measured depth of 1740.4 metres, the well was cased and suspended with preparations underway to return to the site for flow testing.
Begg said the company considers Tulainyo 2-7 as a potential “play opening” well.
“If we are successful with the test program, we have a real shot at proving up at Tulainyo what Gasfields believes has the potential to be the largest new conventional gas project in California in many years,” he said.
The Tulainyo project lies on the western flank of the Sacramento Basin, about 120km north-east of Sacramento, and is 8km from a major gas transport trunkline that supplies gas from Canada into California’s domestic gas market.
Raven is earning a 20% interest in the project through a farm-in deal between Gasfields and the other Tulainyo joint venture partners: operator California Resources Production Corporation, and Cirque Resources.
Asset sale and name change
Earlier this month, Raven sold its 25% shareholding in Rhino Energy (CBM) Limited which holds prospecting licences in the Serowe region in Botswana.
Its farm-in partner, Strata-X Energy Limited (ASX: SXA), elected to exercise its rights of pre-emption under the farm-in agreement which means Strata-X must pay Raven an immediate deposit of A$25,000, and a further A$125,000 upon the completion of a sale and purchase agreement.
Strata-X must also grant Raven a 3.5% overriding royalty interest over the Serowe licences net to the company’s 25% stake.
The sale and purchase agreement is expected to be finalised by the end of February. Two more payments of $200,000 each are payable two and 4.5 months following completion.
Raven also announced its change of name from Magnum Gas & Power at the start of the year.