News

November 26, 2008

Salinas Energy Reports Continuing Drilling Success On Its North San Ardo Concession On The US West Coast

Yes, we know falling oil prices and the general economic turmoil have wasted the share prices of small cap oil and gas companies not just in the UK but also in Australia and Canada. Even so the hammering that ASX-listed Salinas Energy has taken seems more than a mite overdone. The shares were recommended by a broker in Oz at A$0.57 (57 cents) in July but fell to 10 cents by October. The share have rallied a bit since, not least, we suspect, because of a positive drilling report recently that on its 100 per cent owned North San Ardo (NSA) oilfield on the west coast of the US where the eighth horizontal production well has been completed with strong oil flows throughout the entire 830 feet horizontal section drilled in the oil reservoir.

The company has A$8 million in cash and no debt. It operates and controls its major projects. Operating costs on the NSA field are less than US$10 a barrel. New wells remain economic at oil prices of much less than US$40 a barrel. The latest drilling report means the target output of 287,000 barrels for the whole of 2008 should be met. This equates to 786 barrels of oil a day for the whole year but output is running at nearer 1,000 barrels a day just now. One target that probably will not be...