Pacific Coast Oil and Trust
Pacific Coast Oil and Trust
Pacific Coast Oil Trust (NYSE: ROYT)

Properties Overview

Santa Maria Basin

The Santa Maria Basin consists primarily of oil reserves and prospects in multiple geologic horizons and is one of California’s largest producing oil regions. Conventional production from PCEC’s Orcutt properties is derived from the Monterey, Point Sal and SX Sand formations, which are characterized by long-lived reserves. In addition, the Diatomite and Careaga formations, located at depths less than 900 feet below the surface, provide access to unconventional oil reserves. The portion of the underlying properties located in the Orcutt oilfield consists of 4,482 gross (3,608 net) acres.

Orcutt Conventional

The Orcutt oilfield was discovered in 1901 and has produced continuously since that time. Initial production from the Orcutt oilfield came from the Monterey and Point Sal formations, which are located at depths between 1,700 and 2,700 feet below the surface. The Monterey formation in the Orcutt oilfield is a fractured dolomitic shale that is highly productive. The Point Sal formation is a shallow marine deposited turbidite sandstone that is also highly productive. Oil recovery from these formations is enhanced by waterflood injection. Cumulative production from the Monterey and Point Sal is approximately 180 MMBoe. Beginning in 2005 the SX formation underlying PCEC’s Orcutt properties was developed. The SX formation is a silty sandstone at a depth of 1,300 feet below the surface. Cumulative production from the SX formation since 2005 is approximately 0.8 MMBoe. A waterflood was initiated for the SX formation in 2009 to maintain reservoir pressure. The producing wells are all artificially lifted with rod pumps and electric submersible pumps. There are currently 125 Monterey, Point Sal and SX formation producing wells, and 58 waterflood injection wells on PCEC’s conventional Orcutt properties. PCEC has operated its Orcutt properties for over seven years. PCEC operates 100% of these assets and has an average working interest of approximately 95%.

Orcutt Diatomite

The Diatomite is a massive silica-rich rock composed of the shells of single-cell organisms that were abundant during certain geologic periods. A Diatomite formation has very high porosity (up to 70%) but very low permeability, meaning fluids will not flow through the rock. Enhanced recovery techniques are used to produce oil from a Diatomite formation. In the 1990s, companies in California began to develop the Diatomite formation utilizing cyclic steam injection to enable oil recovery. These Diatomite formations have very high oil content but are unable to flow oil to a well bore without the cyclic steam injection. The recovery process in the Diatomite consists of injecting steam into each well, letting the steam soak for one to two days, and then producing the well by flowing the hot oil and water to surface. The process is sometimes enhanced by pumping the oil and water for one to four weeks, until the well is ready to be steamed again.

The Diatomite formation in the Orcutt oilfield is a shallow zone that lies approximately 100 to 900 feet below the surface. PCEC began cyclic steam development in 2005 and was producing 49 Diatomite wells using the process described above as of December 31, 2011. PCEC began a project expansion in 2011 to increase the total Diatomite project to 96 wells.

PCEC has targeted the Diatomite formation at depths greater than 400 feet below the surface for development, the area of which covers 750 acres within PCEC’s Orcutt properties. PCEC has developed approximately 30 acres to date, and produced over 420 MBoe from the Diatomite oilfield.

Careaga formation

Overlying the Diatomite formation in the Orcutt oilfield is the Careaga sandstone reservoir. The Careaga outcrops at the surface in some locations and extends to depths of 90 to 160 feet below the surface. This reservoir contains very heavy oil (11 degree API) that can flow to the surface through seeps. PCEC is collecting the Careaga oil that flows to the surface in containers utilizing a French drain system to gather the oil. PCEC is producing approximately 130 Bbls/d of the Careaga oil that is pumped from the containers and sold with the rest of its crude oil production. Cumulative production from the Careaga formation is approximately 200 MBoe.

Los Angeles Basin

Similar to the Santa Maria Basin, the Los Angeles Basin is characterized by its mature oilfields with long production histories that have produced more than nine billion Bbls of oil since its discovery in 1892. The Underlying Properties in the Los Angeles Basin consist of the West Pico, Sawtelle and East Coyote properties. These properties are characterized by their long-lived reserves with well established, predictable production profiles and low decline rates. The portion of the Underlying Properties located in the Los Angeles Basin consists of 2,107 gross (1,049 net) acres after giving effect to the East Coyote and Sawtelle Reversion. Prior to the East Coyote and Sawtelle Reversion the portion of the Underlying Properties located in the Los Angeles Basin consisted of 500 net acres.

West Pico

The West Pico Unit was developed from an urban drilling and production site and came on production in 1966. In 2000, PCEC undertook a modernization of its facility and installed a permanently enclosed, electric, soundproof drilling and workover rig that allows for uninterrupted drilling and workover operations despite its close proximity to residential neighborhoods. Production from the West Pico Unit comes from sandstone reservoirs ranging in depths between 4,000 and 7,000 feet below the surface. Oil recovery is enhanced by waterflood injection. Cumulative production from the West Pico Unit is approximately 70 MMBoe. The producing wells in the West Pico Unit are all artificially lifted with rod pumps and electric submersible pumps. There are currently 37 producing wells and 6 waterflood injection wells in the West Pico Unit. Twelve new wells have been drilled from this location since 2003. PCEC has the potential to drill up to 15 additional wells in the West Pico Unit.

West Pico also includes three wells held by the Stocker JV, a joint venture between PCEC and PXP. In accordance with the contractual arrangements with PXP, PXP operates these three wells that were drilled from its facility to three lease line locations between PXP’s and PCEC’s production units. These wells are equally owned by PCEC and PXP, and PCEC receives the production attributable to its properties.

Sawtelle

PCEC’s Sawtelle property is similarly situated in an urban environment. The Sawtelle oilfield was discovered in 1965 and is currently the deepest producing oilfield in the Los Angeles Basin with well depths up to 11,500 feet below the surface. Production at PCEC’s Sawtelle property comes from sandstone reservoirs in three separate pools ranging in depth between 7,500 and 11,500 feet below the surface. Oil recovery is enhanced by waterflood injection in two of the three pools. Cumulative production from the Sawtelle property is approximately 19 MMBoe. The producing wells are all artificially lifted with hydraulic pumps, and electric submersible pumps. There are currently 11 producing wells and three waterflood injection wells in PCEC’s Sawtelle property.

East Coyote

The East Coyote oilfield was discovered in 1909. Production at PCEC’s East Coyote property comes from three sandstone formations ranging in depth from 2,000 to 6,000 feet below the surface. Cumulative production from PCEC’s East Coyote property is approximately 106 MMBoe. The producing wells are all artificially lifted with rod pumps and electric submersible pumps. There are currently 46 producing wells, and 14 waterflood injection wells in PCEC’s East Coyote property.

 

Business Wire InvestorHQ℠