Sarasota, FL 4/18/2008 9:52:08 PM
Unconventional Oil Recovery is Growing on the OTCBB
Pennycents Magazine, the market’s most valuable research tool covering micro-cap, penny stocks and otcbb equities, issued the following daily column by Brian Kline.
The fact that the price of oil hits a new high every week is no longer headline news. What is news is that high oil prices are making unconventional oil recovery worth the effort.
The Department of Energy (DOE) reports that conventional domestic oil recovery only yields 10 percent of the oil deposit. Using secondary techniques such as injecting water or natural gas into the oil deposit can recover between 20 to 40 percent of the oil but still abandons 60 percent.
Enhanced oil recovery (EOR) or unconventional oil recovery can recover up to 60 percent of the original oil deposit. Thermal recovery involves injecting steam into the deposit to lower the oil viscosity and drive it to the wellhead. Another technique is to inject gasses such as nitrogen or CO2 into the deposit where it expands and drives the oil to the wellhead.
DOE believes that CO2 injection shows the most commercial promise. A commercial operation along the North Dakota and Canadian border began injecting CO2 and now expects to lengthen production by 25 years along with recovering 130 million barrels of oil that otherwise would have been abandoned.
Additionally, DOE intends to fund between three and six new projects during 2008 to improve unconventional oil recovery technology. The primary focus will be on recovery of oil form shale and the recovery of heavy viscous oil.
EnerJex Resources (EJXR) is an OTCBB company currently operating unconventional oil recovery fields and exploring additional fields. The Black Oaks project has 13 injection wells that began production at a rate of 50 barrels per day and has seen production increase to 200 barrels per day.
The Thoren project has completed 11 EOR wells with plans to continue aggressively drilling during 2008. The Tri-County project has identified 170 potential drilling locations and has 20 producing wells. The DD Energy project has completed drilling 10 wells with four in production.
Platina Energy Group (PLTG) owns certain exclusive rights to the Thermal Pulse Unit (TPU). This is a proprietary heavy oil recovery technology capable of increasing certain types of production. Wide spread use of the technology has the potential to reduce US dependence on foreign oil from increased efficiency of existing US reserves. The company plans to use this and other advanced technologies in its own oil recovery projects and distribute the technology to others in the EOR business.
Platina Energy Group recently acquired “down hole” oil field technology as part of a licensing agreement from the University of Texas. The patented technology solves a common problem in the oil and gas industry with certain types of wells where the ability to produce natural gas at the same time as oil, had previously been limited.
This technology simultaneously brings up both oil and gas, which means you capture the gas instead of venting it off. Not only is this economically advantageous, it is also environmentally responsible.
These and other EOR technologies will be applied to the Clinton County Field project, which is now being developed after a previous developer abandoned it years ago.
The Young County Project was abandoned with 22 well bores in disrepair. Based on the most recent data, the company has decided to re-plot the property and bring in new technology that will optimize production across the existing wells and for future wells to be drilled. Although production has been limited to date, considerable reserves are estimated within the formation.
Undoubtedly, this technology will continue to evolve. Maybe the day will come when the oil giants take an interest in recovering substantially more oil than they do today. Until then, these small entrepreneurial companies have the abandoned fields to themselves.
The writer does not own shares in the above stocks.
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