By Larry Shultz, COO Fossil Bay Energy LLC
At half the cost and 5-10 times the ultimate oil recovery: Exhaust Gas Injection N2+CO2 EOR (Enhanced Oil Recovery) can revitalize oil production in thousands of currently closed and non-producing oil fields to replace the decline in shale oil production due to the collapse in the global price of oil.
Over the last six years, the American oil industry and Wall Street Investors worked together to increase U.S. shale oil production from less than 500,000 barrels per day in 2008 to over 5 million barrels per day of additional domestic oil production in 2015.
This exponential growth in tight oil production was driven by cheap money (QE Quantitative Easing by the U.S. Federal Reserves) and high oil prices greater than $80-$100 per barrel – all of which diverted attention from all the many negative problems of fracking oil from hard rock shale beyond just the environmental issues.
Financially speaking, extracting oil from shale is expensive; depending on the shale type, it can cost more than $50-$80 a barrel just for an oil company to break even; it has suffered average terminal decline rates of more than 80% over 3 years; and it has proven itself economically unsustainable because shale oil extraction technologies can barely extract just 2%-7% of the available oil contained in the shale according to public records and SEC filings by public oil companies.
What most Accredited Investors don’t realize is that the best place to find new sources of oil is in old oil fields.
Even though most of America's old conventional permeable oil reservoirs became pressure-depleted or high water-cut, and were forced to closed down years ago (when the sales value of the oil being recovered became worth less than the aggregate costs to pump/lift it out of the ground, separate the oil from the water and then re-inject the dirty produced-water back into the ground, which is expensive) – these aging and mature old oil fields still contain significant amounts of recoverable, stranded oil using the latest portable Exhaust Gas Injection EOR technologies developed by Fossil Bay Energy.
The Big American Oil Secret is that for every barrel of oil taken out of a conventional permeable oil field during the primary oil recovery phase, more than 3-4 barrels of residual, stranded oil still remains in the ground. Today this stranded oil can be recovered cost-effectively using Fossil Bay's portable exhaust gas injection EOR equipment to re-pressurize the reservoir, mobilize the oil and push it up a production well.
What America has needed for the last decade is a low cost portable CO2 EOR solution to mobilize the stranded oil underground in order to extract it; a CO2 EOR injection system that is not restricted by the high cost and regulatory nightmares of getting a permit to build a CO2 pipeline – yet is mobile and can bring a much-needed low-cost supply of CO2 and other effective gas injectants to any EOR-worthy oil field in America that has no nearby CO2 pipeline!
This need can now be fulfilled by the portable Exhaust Gas Injection N2+CO2 EOR services provided by www.FossilBayEnergy.com.
Owners and operators of EOR-worthy oil fields will no longer need to dream about or pray for a miracle to finance and build a CO2 pipeline to their oil field -- now with Fossil Bay's portable Exhaust Gas Injection EOR solution, mineral rights owners and oil leaseholders can benefit from revived oil production in their old oil wells.
Using the latest combined thermal, chemical and gas injection N2+CO2 EOR technologies, ultimate recoveries of more than 50%-65% of the stranded oil from the ground can be newly achieved at an all-in horizontal injection & production well drilling, completion and Gas Injectant operating cost of less than $15-$25 per barrel of oil recovered.
If there is already properly operating equipment on site -- and no new horizontal injection or production wells need to be drilled – then the cost of portable Exhaust Gas Injection N2+CO2 EOR revitalization can fall to less than $15 per barrel.
Even with the price of oil at $40 a barrel, oil lease operators employing Fossil Bay Energy's portable exhaust gas injection EOR process can generate significant returns-on-investment (ROI) -- and enjoy even higher returns if and when the price of oil rises over the next decade to OPEC's stated goal of $75 a barrel.
In order to encourage investment by Accredited Investors in a gas injection Enhanced Oil Project that can increase domestic oil production, reduce foreign oil imports, and keep billions of American fuel-dollars here at home each year:
Congress granted generous tax-deductions that enable investors to deduct 100% of the Intangible Drilling Costs and 100% of the Qualified Tertiary Gas Injection EOR costs of a CO2 EOR project from the active ordinary income of its investors, according to IRS rules.
These deductions can enable first-year tax-deductions to Investors (against ordinary income) of greater than 65% of their invested capital.
Fortunately for American investors, there are literally 1000s of old, aging and abandoned oil wells and oil fields whose geological characteristics and past production history make them the best candidates for portable Exhaust Gas Inject N2+CO2 EOR, whose daily oil production contributions can one day make America Energy Independent from foreign oil imports.
Fossil Bay Energy co-founder and chairman, Mike McGhan, was co-founder and CEO of Hanover Compressor in 1990 (now “Exterran”) and Valerus Compression Services in 2004. McGhan will oversee the Company’s manufacturing and exploitation of its N2+CO2 Exhaust Gas Injection EOR equipment in EOR-worthy oil fields throughout the U.S.
Check out my other portable CO2 EOR Technology Company Projects blogs and articles at: