Neon confirmed that the Paloma Deep exploration well was spudded on September 21, 2011. The Paloma Deep prospect is located in the San Joaquin Basin, onshore California, within and beneath the Paloma oil field which has thus far produced in excess of 133 million barrels of oil equivalent (MMBOE).
This vertical test well is designed to evaluate seven prospective oil and gas objectives, two of which are unconventional targets. All seven zones produce either in the field or within the region, and the cumulative unrisked in place prospective resources are estimated at some 300 MMBOE. Unrisked recoverable resources are estimated at 33 MMBOE, based upon historical regional recovery efficiencies of approximately 11%. Drilling is expected to take approximately two months to reach a planned Total Depth of 15,500 feet, at a budgeted cost of US $4.9 million.