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BIG PICTURE
S P E C U L A T O R
The Coming Boom in
Enhanced Oil Recovery
Jim Letourneau, P. Geol.
Big Picture Guy
Las Vegas Hard Assets Investment ConferenceSeptember 10, 2008
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Experience is something you
don't get until just after you
need it.
Steven Wright
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Jim Letourneau
B.Sc. In Geology 1985 from UofA
Specializing in petroleum geology and
geochemistry
2 CSPG Tracks Awards CSPG Link Award
NEB Hearing expert witness
Interviewed on CBC, CNBC Asia Energy TV
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Crude Oil Prices 1861-2006
Crude Oil Importers - 2005
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The coming boom
September 3 News Release - Nalco (NYSE:NCL)
Commercializes BrightWater Enhanced Oil
Recovery Technology
September 4 News Release - Stepan
(NYSE:SCL) and Nalco (NYSE:NCL) Create First
Integrated Enhanced Oil Recovery Platform.
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Results
Reservoir Sweep Efficiency Technology after
early applications demonstrated crude oil
production increases of25 to 80 percent in test
wells.
Powerwave led to a 83 percent increase in oil
production from an Alberta oil field the field's
production had been declining at the rate of 2.3
per cent per month.
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Active EOR Projects
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Concern
Special Interest Groups are
Mobilizing
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Special Interest Groups
Politicians are looking for votes
Airlines target oil speculators
Pickens talks his book
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Schweitzer Speech
Petro-dictators!
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Schweitzer
Brian Schweitzer - Governor of Montana
Right now, the United States imports about 70 percent of its oil
from overseas.
At the same time, billions of dollars that we spend on all that
foreign oil seems to end up in the bank accounts of those
around the world who are openly hostile to American values and
our way of life.
This costly reliance on fossil fuels threatens America and the
world in other ways, too. CO2 emissions are increasing global
temperatures, sea levels are rising and storms are getting
worse.
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Palin Speech
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Palin
We cannot leave ourselves at the mercy of
foreign suppliers.
In a McCain-Palin administration, we're going tolay more pipelines, and build more nuclear
plants, and create jobs with clean coal, and move
forward on solar, wind, geothermal, and other
alternative sources.
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SOS - Airline Funded
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Pickens Plan
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Pickens Plan
Transition to more wind power from 1-20% of
electricity needs
Use natural gas for transportation
Easy oil has been produced Greenhouse gas emissions from natural gas are
23% lower than diesel and 30% lower than
gasoline.
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Hubberts Peak?
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Hubbert Trivia
1940 - published The Theory of Ground-WaterMotion
Founded the Technocracy Incorporated in 1933with Howard Scott - a movement which grew to
250,000 members Quote from a former student - Fred Meissner
During my contact with Hubbert as a student, I
found him to be arrogant, egotistical, dogmaticand intolerant of work he perceived to beincorrect.
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Hubbert Trivia
But above all, I judged him to be a great scientist
dedicated to solving problems based on simple
physical and mathematical principles.
He told me that he had a limited lifetime in which
to train and pass on what he knew, and that he
couldn't waste his time with people that couldn't
comprehend.
He was a complex and fascinating person.
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Hubbert Trivia
Correct statement of Darcy's Law.
Mathematical demonstration that rock in theEarth's crust is plastic, and that the Earth's crustdeforms over time.
Prediction of migration paths of hydrocarbons.
Demonstration that the Earth's endowment ofcrude oil is finite, that the rate of oil productionreaches a maximum (i.e., peaks) when
approximately half of the original resourceremains, and thereafter goes into irreversibledecline.
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There is HOPE
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Salt Creek, Texas
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Weyburn, Saskatchewan
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The EOR Wedge
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66% Left Behind
The ability to rescue additional production from
mature oilfields, many times without the need for
further drilling, can have a positive impact on
domestic oil production in the United States
where the August 2006 issue of World OilMagazine reports 374 Bbbl of oil, or
approximately 66% of discovered oil remains
stranded in reservoirs.
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US DOE Statistics
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Definitions
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Primary Recovery
The first stage of hydrocarbon production, in
which natural reservoir energy, such as gasdrive,
waterdrive or gravity drainage, displaces
hydrocarbons from the reservoir, into the
wellbore and up to surface.
10% recovery of Original Oil in Place
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Secondary Recovery
The second stage of hydrocarbon production
during which an external fluid such as water or
gas is injected into the reservoir through injection
wells located in rock that has fluid communication
with production wells. The purpose of secondaryrecovery is to maintain reservoir pressure and to
displace hydrocarbons toward the wellbore.
15-40% of OOIP
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Primary + 15 to 40% Secondary Recovery
Globally the average oil recovery
factor (RF) is around 32% according
to the SPE
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CO2 and EOR
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Enhanced Oil Recovery - EOR
The third stage of hydrocarbon production
during which sophisticated techniques
that alter the original properties of the oil
are used. Enhanced oil recovery can beginafter a secondary recovery process or at
any time during the productive life of an oil
reservoir. Its purpose is not only to restore
formation pressure, but also to improve oildisplacement or fluid flow in the reservoir.
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Main EOR Types
1)Chemical flooding (alkaline flooding ormicellar-polymer flooding).
2) Miscible displacement (carbon dioxide
[CO2] injection or hydrocarbon injection).3) Thermal recovery (steamflood or in- situ
combustion)
4) Also IOR (improved injection), electricalmethods etc.
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CO2 Flood History
First EOR project was in West Texas in 1972,and most of the EOR in the world today isconcentrated there.
Only about 1/4 of the CO2 used in EOR is
derived from industrial sources (Hill, 2003, p.25). Most extracted from natural CO2formations.
The value of CO2 for EOR has been sufficent towarrant the construction of several multi-
hundred km CO2 pipelines, including one of800 km from the McElmo Dome on SWColorado to the Permian Basin oil fields inWest Texas.
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Denbury Resources (NYSE:DNR)
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CO2 Flood
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Petrobank (TSE:PBG)
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THAI Process
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Leveraging Technology
Petrobank will take a 50-per-cent
operating interest in Duvernay's Dawson
property -- estimated to hold100 million
barrels of crude -- where it will use itsToe-to-Heel Air Injection system (THAI) to
boost recovery rates and output.
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The Boom
Look for companies with new
processes.
Look for companies that embrace new
technology
CO2 sequestration angle
Turning stranded or heavy oil into
RESERVES triggers a re-pricing of theassets.
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A No Lose Proposition
Provide your email address or give me
your business card.
I will send you my 5 part Enhanced Oil
Recovery Investing Course.
Table in Speaker Area or go to
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www.jimletourneau.com