Neon Energy has proven the presence of producible oil, gas and condensate during production testing at its Paloma Deep-1 well, in California, US.
Contingent resource estimated at 26 million barrels of oil and 22 billion cubic feet of gas were observed within the Lower Antelope Shale, Lower Stevens Sand and Fruitvale Shale.
Neon said testing of the Fruitvale and Lower Stevens 'B' sand at the first well, Paloma Deep-1, showed 1.9 million cubic feet per day of gas and 226 barrels per day of oil after which the flow abruptly ceased.
The company is now testing the Lower Antelope unconventional shale with pump-assisted rates ranging from 20 to 200 barrels of fluid per day, and oil cut ranging from 10% to 20%, to gather data to understand the commercial potential of the zone.
Additional shallower zones are planned to be tested in the well, including the Paloma Sandstones and the Upper Antelope Formation.
Neon has commenced drilling of Paloma Deep-2 to confirm the reservoir characteristics and areal extent of productive zones encountered in PD-1, which is progressing on schedule at 11,600ft.
Additionally, a shallow exploration well Paloma-3 was spudded on the western portion of the leased acreage, targeting shallow zones that could not be tested in the other two wells.
All three wells are targeting reservoirs that have produced hydrocarbons either on the Paloma structure itself, or nearby within the prolific San Joaquin Basin.
Paloma-3 well reached 6,000ft total depth and has been completed for production testing of thin gas sands within the Etchegoin Sandstone Formation.
A workover rig is to be moved at the wellsite prior to testing, with results expected within the next two weeks.
Neon holds a 75% working interest in the project with Solimar holding the remaining 25%.
Image: Flaring gas during a test at Paloma Deep-1. Photo: Neon Energy.