What is the Monterey Shale? The Monterey Shale is an oil field located in California. The Monterey Shale can be found in both the Santa Maria Basin as well as
the San Joaquin Basin and could hold up to 1 trillion barrels of oil potentially. If only a fraction of this oil can
be recovered, it would be the largest oil discovery in California in over 35 years. However, the main company drilling
the Monterey Shale has not gotten off to a good start. Oil company Venocco opened shop in the Monterey Shale back in
the summer of 2010. The company recently drilled a Monterey Formation well which was uneconomical due to water
and had to be abandoned. The Monterey Shale is being explored onshore and offshore on the California coast.
Venoco spent $23 million or 37% of its third quarter capital expenditures
on projects targeting the onshore Monterey Shale. The company spud three wells during the quarter, including its first horizontal
well. Through nine months of 2010, the company has spud eight wells (six vertical and two horizontal). Of the six vertical
wells, three were completed and are in various stages of testing, one was completed but has been temporarily abandoned and
will be evaluated as a water disposal well, one was used as a pilot hole for the company's first horizontal well which was
ultimately completed during the third quarter, and one recently reached total depth and will be completed and tested. Of the
two horizontal wells, one was completed during the third quarter and tested with a very high water-cut making it uneconomic;
the second has been completed and the company expects to begin testing in early November. The company spud its seventh vertical
and its third horizontal wells last month and expects to spud an additional horizontal well during the fourth quarter bringing
the total number of wells spud during 2010 to 11 (7 vertical and 4 horizontal).
"It
has taken five years to complete the regional study, acquire land positions and commence drilling evaluation and development
wells. While we are as anxious as anyone for results, our years of experience tell us that success won't be measured by any
one well," said Tim Marquez, Venoco's Chairman and CEO. "We have made some big advances this year and while we've
had some disappointments, we have seen nothing from our drilling this year that dampens our excitement about the Monterey
opportunity."
The Monterey Shale is being explored offshore to the west of Santa Barbara County, CA and
Ventura County, CA in the South Ellwood Field. Onshore, the Monterey Shale can be found in the following counties located
in California.
Kern County, CA - Kings County, CA - San Luis Obispo
County, CA - Santa Barbara County, CA - Ventura County, CA - Monterey County, CA - Tulare County, CA - Fresno County, CA -
San Benito County, CA - Madera County, CA - Merced County, CA - Stanislaus County, CA - Santa Clara County, CA.
