Property description and fact-finding report for NPR-2, Buena Vista Hills Field, Kern County, California

Abstract

The US Department of Energy has asked Gustavson Associates, Inc. to serve as an Independent Petroleum Consultant under contract DE-AC01-96FE64202. This authorizes a study and recommendations regarding future development of Naval Petroleum Reserve No. 2 (NPR-2) in Kern County, California. The report that follows is the Phase 1 fact-finding and property description for that study. The United States of America owns 100 percent of the mineral rights and 96.1 percent of surface rights in 10,447 acres of the 30,182 acres contained within NPR-2. This property comprises the Buena Vista Hills Oil Field. Oil and gas companies have leased out 9,227 acres in 17 separate leases. Discovered in 1909, this field has approximately 435 active wells producing 2,819 gross barrels of oil and 8.6 million cubic feet of gas per day. Net production to the Government royalty interests include 200 barrels of oil per day and 750 thousand cubic feet of gas per day. Royalty revenues are about $1.7 million per year. Remaining recoverable reserves are approximately 407 thousand barrels of oil and 1.8 billion cubic feet of gas. Significant plugging and abandonment (P&A) and environmental liabilities are present, but these should be the responsibility of the lessees. Ultimate liability still rests with the United States and may increase as the leases are sold to smaller and smaller operators.