California
Overview
Xstate holds various working interests in a small number of producing gas wells and, more importantly, associated land leases and production and pipeline access equipment in the Sacramento Basin, California. Such assets complement the exploration leases that Xstate has interests in that are interpreted to have world-class Prospective Resource potential.
Xstate’s joint venture interests are the results of re-interpretation of an extensive database of oil and gas well information, including seismic data and published information that reveals a number of attractive drillable conventional sandstone reservoir gas prospects.
California has a long history of oil and gas exploration and production with well-established infrastructure and working environment. However, business is conducted in a different manner than onshore Australia. Most mineral rights are held by individuals and not obtained from government bodies. Companies wishing to drill and produce, seek leases from the mineral rights owners then seek permits from the government regulatory bodies and are obligated to make public limited data. Seismic is proprietary and interpretations of drilling results and prospectivity are not lodged with the government but held privately. The result is that most wells are drilled with only part of the prospective acreage under licence to the exploring company and therefore the active company keeps the detail seen in Australian releases to a lower level. Even when the full land picture is achieved there is a competitive advantage to secure ‘look alike’ prospects on nearby acreage.
Borba Natural Gas Drilling – Xstate 33.33% working interest
The Borba Prospect is a large four-way dip closure mapped on 3D seismic with multiple targets and multi-TCF potential. Final drilling permits have been received from the Californian regulators for the drilling of the well (Borba 1-7).
Borba is interpreted as the optimal location to test multiple stacked amplitude anomalies and potential channel fill conventional sand reservoirs in a vertical well.
There were no changes to the California assets and evaluations to monetize the Borba gas discovery continued with an ongoing review of alternative developments, these include electricity production for an onsite data centre, hydrolysis of natural gas for Hydrogen generation for the local transport market or other means of transporting the gas molecules to local markets.
Sacramento Basin Production – various working interests
Xstate acquired a working interest in minor gas production rights in the Sacramento Basin onshore California in 2013 and 2017.
The purpose was to acquire the leases for further exploration, acquire associated infrastructure to fast track any exploration success and to access an extensive 3D seismic database from which to generate new exploration opportunities.
No changes to the Sacramento project with the Company maintaining its leases in the Sacramento Basin during the quarter. Xstate has working interests (WI) of between 10% and 33% in oil and gas leases.
In addition to our existing Sacramento Basin production, the Company is investigating workover and exploration opportunities to take advantage of the current high gas prices in California.
This would be 28,043 for gross gas and 3,575 for net gas to Xstate.