Location: Santa Barbara County, California
The Casmalia project is located in northern Santa Barbara county, approximately 7 miles southwest of Santa Maria, CA. Underground Energy has a farm in lease on 350 acres (with the option to expand) containing a highly porous diatomite deposit with a high oil saturation. The oil bearing diatomite is relatively impermeable and requires high density wells to "frac' (fracture) the rock using a cyclic steaming method.
350 acres under farm-in lease = 300+ Million barrels OIP:
The oil in place contained within this oil-impregnated diatomite deposit for the 350 acre leased is estimated at 300 Million barrels oil in place (OIP) (~150 Million barrels recoverable). Additional opportunity also exists for expansion to include a total of 600 Million barrels OIP.
Historic exploration and production in the area:
This area has been a focus of exploration and production since the late 1920's with the Airox and NTU mines, which mined the oil-impregnated diatomite. Over 30 existing core hole and exploration wells have been drilled along the resource trend. Santa Maria Pacific, LLC has installed test wells and production facilities south of Underground Energy's farm-in acreage and is conducting cyclic steam production testing from vertical wells.
Production & Recovery plan:
Underground Energy's approach to this vertically dipping resource is to drill slightly inclined horizontal wells into the diatomite from tunnels constructed adjacent to the formation. This underground approach has minimal surface disturbance and is the only viable method to achieve the well density necessary for recovery of oil from the diatomite formation. The hilly topography and environmental permitting issues precludes high density vertical wells. Oil production from the impermeable diatomite requires reservoir fracturing under high pressure using cyclic steaming technology from tightly spaced wells. Underground Energy's first phase project includes an adit (tunnel) declining form the surface to a production tunnel parallel to the strike of the diatomite formation. Slightly inclined horizontal wells are designed to maximize cyclic steaming efficiency and production.
The underground project includes an underground storage room containing
and oil water separator and water and oil storage tanks and other
ancillary equipment. This underground fluids processing facility
reduces the surface footprint of the project. Ventilation and
emergency exit shafts will extend from the main level tunnel to the
ground surface to provide a second safe egress.
Status of project:
Underground Energy is currently in the permitting and delineation phase of this project. A grading permit has been issued from the County of Santa Barbara for the preliminary working pad. Delineation core holes have been designed. These core holes will provide information about the physical and geologic characteristics of this deposit. Other work includes: permitting of commercial phases, environmental clearance, detailed engineering design of underground components and geologic study of the formation to confirm the location, depth, and quality of the resource.
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