Ivanhoe Energy Begins Production from New Horizontal Well In California


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Initial oil and gas production has commenced at the Citrus No. 1 well, Ivanhoe Energy Inc.’s first horizontal well in the Citrus Prospect area. Stabilized initial production rates for the well are 210 barrels of 34 degree API oil per day and 195 Mcf of gas per day. The Citrus No. 1 well extends the southern productive area of the large Lost Hills field in California's prolific San Joaquin Basin. Ivanhoe is the operator and owns interests ranging between 83 percent and 100percetn in leases comprising the Citrus Prospect, covering 2560 acres.

The initial production through a 35/64-inch choke is yielding 2000 barrels of total fluid per day, 210 barrels of 34 degree API oil per day and 195 Mcf of gas per day with a flowing tubing pressure of 270 Psig at the surface. At nearby offsetting vertical wells owned by other companies, reported stabilized initial production rates averaged 125 barrels of oil per day and 300 Mcf of gas per day with a water cut of about 80 percent. Water production, along with oil and gas, is standard in this field.

A total horizontal section of more than 1,900 feet was drilled at Citrus No. 1 at a vertical depth of 7,750 ft. in the Antelope Shale formation, an important producing zone in offsetting wells. A high volume fracture stimulation was successfully performed on the well in mid January. The fracture treatment utilized an innovative technique that has been successfully applied in the nearby North Shafter and Rose fields. The well was cleaned out to bottom and placed on production in January 2004, into offsetting sales facilities.

Continued successful production from Citrus No. 1 could justify as many as 25 additional horizontal-drilling locations in the Citrus Prospect area. The presence of five stacked, multiple oil zones in this well could justify multilateral horizontal well bores in future wells. The other four potentially productive oil zones in the Citrus No. 1 well have not been tested at this time, but they do produce in offsetting wells.

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