EOR (enhanced oil recovery)

EOR is one reason why US domestic oil recovery is increasing in spite of shutdowns of gulf oil rigs. This example from the Bakken formation in Saskatchewan, Canada gives a snapshot of the amazing increase in oil recovery.

In early January 2011 Petrobakken first mentioned some experimenting with Enhanced Oil Recovery (EOR) that it was doing. The results from this experimentation have been encouraging and Petrobakken has moved the EOR process to the pilot stage. On the conference call Petrobakken’s CEO expanded on EOR, and what the company has seen and thinks is likely.

Results From Initial Experimentation

  •  
    • For a 2 Day Period in 2010 Petrobakken injected CO2 into a horizontal well
    • The offsetting horizontal well immediately doubled its rate of production
    • After 10 months the offsetting horizontal well was still producing at a rate 50% higher than it had been prior to the injection
    • In the following 10 months each offset well recovered 5,000 more barrels of oil than it would have if left to its natural decline curves
    • The CEO believes that with a full EOR application that a double or even a triple in production could be the near term result (remember the experimentation involved only 2 days of CO2 injection and the results were dramatic)

As you can see, the initial results from a production standpoint are extremely interesting.

On the conference call Petrobakken’s CEO also suggested that EOR application could reasonably be assumed to increase the amount of oil recoverable from the Bakken from the 15% (the current basis for Petrobakken’s booked reserves) to more like 25% to 30%.

He said an increase of 66% to 100% in the amount of oil that can be recovered. This is not the first time I’ve heard numbers like this as Crescent Point Energy (CSCTF.PK) has mentioned similar increases in oil recovered from its waterflooding EOR efforts.

In the pilot program it is now going forward with, Petrobakken will inject natural gas instead of CO2– because it is cheaper and readily available. That injected natural gas will eventually be recovered through production.

I listened to this part of the call a few times just to make sure I was getting my head around this. If these EOR techniques double the amount of oil that can be recovered, then companies like Petrobakken are unquestionably going to be excellent investments at current prices.

Source:http://seekingalpha.com/article/257171-can-petrobakken-energy-double-reserves-on-property-it-already-owns

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