Sacramento Valley exploration and development drilling for natural dry gas fields is setting a brisk pace. Incentives supporting this level of activity are found in geology, economics, and politics.

Geologically, the basin contains a thick section or rocks with favorable reservoir and source characteristics, a portion of which has already been proved productive. A moderately active orogenic history has provided an environment conducive to petroleum traps. Paleocene and Cretaceous portions of the basin are relatively unexplored.

Economically, the most important factor is the competitive position of this domestic gas by virtue of its proximity to an assured expanding market and an ample latitude for future price increases without destroying this position with imported gas and(or) fuel oil. The value of Sacramento Valley gas is slightly more than double the average wellhead price throughout the United States. Average Sacramento drilling, completion and land acquisition costs are very favorable when compared with other areas of the nation.

Politically, the California producer, selling his product within the state, is not subject to Federal regulation of his producing activities or his pricing negotiations. To date, no controls are imposed on his production rate by State authority. The producer can enjoy the benefits of a successful exploration program without artificial restraints.

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