EKHO Project Update - 2

Business Editors 
VANCOUVER, B.C.--(BUSINESS WIRE)--Dec. 15, 1999-- 
Further to the news release dated November 29, 1999, David
Patterson Chairman of the EKHO Project consortium, provides the
following progress report on the EKHO Project. As part of their
strategic planning Tri-Valley Oil and Gas ('TVOG'), the EKHO project
operator, together with its consulting engineers identified the
possibility of re-entering the 66X-3, a deep well drilled in 1974 on
leases now held by TVOG. The 66X-3 well, which bottomed at 18,876
feet, was America's deepest oil producer according to the February,
1999 issue of World Oil Magazine. 
On December 6, 1999 a wellhead was delivered for installation on
66X-3. In preparation for installation of the wellhead, it was
discovered that the casing at surface does not meet specifications to
handle the known pressures in the hole at depth. Given the numerous
obstacles that could have prevented re-entry it is fortunate that the
problem was discovered early on and at minimal cost. The consortium
had been prepared to spend upwards of $500,000 to attempt to re-enter
66X-3, in anticipation of realizing significant savings in time and
money over drilling a new hole. As a result of this information, TVOG
has elected to commit to a new hole. The consortium has been advised
by TVOG that 66X-3 is a candidate for later re-entry for shallower
production as the casing appears to have sufficient strength and the
logs have shown some extremely attractive shows up hole. 
In order to cover all eventualities, Tri-Valley took the
precaution of contracting a deep drilling rig from Nabors Drilling
Company in Bakersfield, California. Tri-Valley will now locate its
initial test well between the 31X-10 and the 66X-3 wells which flowed
at rates as high as 1,000 and 700 barrels a day, respectively, despite
completion problems. The 66X-3 well ultimately produced 11,936 barrels
of 42 degree API oil and 13 MMCF of natural gas before abandonment due
to technical difficulties; other intervals with significant shows were
left untested. The drill site is approximately 40 miles northwest of
TVOG's Bakersfield headquarters in California's San Joaquin Valley, a
prolific petroleum production province. 
It is expected that rigging up for the new hole will begin in
December, with the rig installed before the end of December. Spudding
of the new well is planned for early January 2000. 
On Behalf of the EKHO Project Consortium
David Patterson, Chairman 
The Canadian Venture Exchange has neither approved nor
disapproved of the information contained herein.
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