The Southeast Lost Hills Project (50% interest), San Joaquin Basin, California

The Southeast Lost Hills Project (SELH)is located in the San Joaquin Basin,
in the southern part of California (inland and north of Los Angeles). Within this project, Solimar Energy has a 50% interest in the Block B lease, including
the Jack Hamar wells: 1-13; 2-13; 3-13; 1-12; and associated uncompleted pipeline infrastructure.

The Southeast Lost Hills project is located along the southern flank of the large Lost Hills Anticline. The Lost Hills structure is a hugely prolific feature that has already produced in excess of 400 million barrels of oil equivalent (“MMboe”) to date to the north of the Jack Hamar play.

Southeast Lost Hills is a combination structural stratigraphic trap. The reservoir targets are shallow Pliocene sands that pinch out around the flanks of the Lost Hills Anticline. Seismic amplitude anomalies are associated with the presence of  hydrocarbons. This is a shallow play, with target depths of not greater than 4,000 feet. These shallow wells have been drilled on the northern end of the block. All wells encountered hydrocarbon shows in the Pliocene section, however, testing results over the past years have been inconclusive and hence the commerciality

of the shallow section is yet to be proven.

Solimar Energy has commenced production testing of the four existing Jack Hamar wells. To date, the testing at SELH has resulted in Jack Hamar 3-13

flowing gas at 633,000 cfpd over a 48 hour testing period at a tubing pressure of 1,185 psi on a 6/64 inch choke.  The pressure build-up data for this well is undergoing further analysis. Testing on Jack Hamar 1-13 and 1-12 have so far indicated some gas flows at low rates but at this stage no commercial rates have been established.  Testing has currently moved to the fourth well, Jack Hamar

2-13 where multiple potential gas bearing intervals will also be tested from the bottom up.

Solimar Energy is also working to commercialise the existing successfully tested Jack Hamar 3-13 well.  Work is continuing on a pipeline connection to the Jack Hamar wells.  Detals are being completed on connection points and the required permits.  Terms are also being finalised with a buyer of the gas.