Ivanhoe farms into gas prospect

Allen Baker

Petroleum News contributing writer

Ivanhoe Energy Inc. has an exploration and development deal to farm into acreage in the Sacramento gas basin in northern California. The agreement with Nahabedian Exploration Group LLC was announced Feb. 18.

Ivanhoe is buying an interest in four wells drilled by Nahabedian at its Knights Landing project on a 14,000-acre block in Sutter and Yolo counties, northwest of Sacramento. Ivanhoe, based in Bakersfield, Calif., will build pipelines to the four wells and drill up to 20 added wells for $3.8 million. Its interest will be 50 percent after costs are recovered.

The four wells drilled so far have shown a constricted flow rate of more than 2 million cubic feet daily. Ivanhoe is planning 10 development wells offsetting the four current producers. Ten exploration wells will also be drilled in the block in a program to start in April and run through November.

The wells are expected to cost about $200,000 each, targeting the Starkey Sand formation at depths of 2,000 to 3,500 feet.