WTI Crude
58.69
Brent Crude
64.03
Natural Gas
3.08

How Plasma Pulse Technology Is Boosting Oil Production

News Article Sponsored by WG Manufacturing

Facebooktwitterlinkedininstagrammail

Written by: David Dittman

Click HERE to Read Article From Publisher


0816_INNOV_OilRigs

Let’s face it: The gulf separating those who understand that hydrocarbons will remain a key part of the global economy from environmentalists is a gap in ideology that will never be totally bridged.

That’s despite the argument that, other than water, there’s no liquid that humans rely on more than petroleum. We use it to fuel our cars, heat our homes, pave our roads and create countless consumer products.

But hardcore greens oppose further oil and gas drilling or exploration in any form, both within America and internationally. Thus, there is no way that this demographic would even humor the idea of using a plasma source to stimulate long-lived wells.

There are others out there, however, for whom the goal is simply “to be cleaner.”

Not pure, just cleaner.

And there’s a company with the technology to make the next stage of the North American energy boom not only cleaner, but easier and more efficient, as well.

The shale revolution that’s driven U.S. production to all-time highs was itself fueled by critical innovations in enhanced oil recovery (EOR). These include thermal injection, gas injection and chemical injection technology to support hydraulic fracturing (fracking).

Fracking requires obscene amounts of water, in addition to controversial chemicals – not to mention seismic disturbances recorded in areas of concentrated use.

Plasma pulse technology (PPT) manipulates electrically generated plasma vibrations to reduce viscosity, increase permeability and improve the flow of oil to the surface for extraction.

It does so without causing acidization and absent the use of hydrofracking or chemicals, which are particularly hostile to the environment.

My great-uncle was a key figure in plasma physics research at NASA during the initial stages of the Space Race. So when I hear about new applications, I pay attention.

Now, this is not a magic bullet, reflected in the fact that the share price of the U.S. company that licenses the technology, Propell Technologies Group Inc. (OTCBB: PROP), last traded for 3 1/2 cents per share on the Over-the-Counter (OTC) market.

The stock has enjoyed a few bounces since going public in mid-2010, rising as high as 92 cents in mid-2013.

This year, however, it’s down about 60% and is now trading around its all-time lows. At these levels, the market capitalization is $9.4 million.

There are about 270 million shares outstanding, with average daily volume of about 225,000. So it’s thinly traded and basically a penny stock.

But PPT has its advantages. And those advantages are becoming more and more important with each new law restricting hydraulic fracturing in the United States.

This combination of high-level plasma physics and old-school oil production is innovative and commercially viable. That’s demonstrated by its successful use in more than 200 wells in Russia, China and Eastern Europe by clients including ConocoPhillips, Lukoil, Gazprom and Rosneft.

In the United States, PPT has been used to treat 40 oil wells, 27 of which show an average initial production increase of 295% and an average 88% rise in barrels of oil production over 60 days.

In January, Propell’s board of directors brought in a new CEO, C. Brian Boutte, to reorient the company into one geared toward traditional exploration and production (E&P).

The new strategy is focused on acquiring conventional assets from distressed producers whose overleverage and weak balances sheets leave them particularly vulnerable amid the steep decline and continuing bear market for oil prices.

Propell will apply PPT to boost production from existing wells, with accessible infrastructure in Texas, Oklahoma and Louisiana.

In addition to PPT, Propell is blessed with a solid balance sheet, including ample cash on hand, and the support of deep-pocketed major investors familiar with the technology’s successes outside the United States.

The market for enhanced oil recovery is forecast to grow at a compound annual rate of more than 25%, reaching $225 billion by 2020. So the opportunity is there.

And as the technology is applied in North America and around the world – PPT has been tested at only 400 wells so far, so it’s in the very early stages of development – there’s considerable room for adaptation and innovation.

Right now, the company can use its resources – including its balance sheet and technology – to capitalize on the misfortune of other companies that don’t have the wherewithal to survive oil’s downturn.

In the short term, this reads as a sharp but logical shift that should help the company generate greater cash flow and set it on a quicker course to profitability.

The longer-term case is based on the assumption that oil prices will eventually strengthen.

That old adage that “the cure for low oil prices is low oil prices” now means that waning profits, lower rig counts and declining production amid stabilizing global demand forecasts will eventually build a floor for recovery.

And commodity pricing is subject to geopolitical uncertainty, too. That includes factors such as civil unrest in exporting countries and supply-chain disruptions in key geographic hot zones.

At the same time, providing PPT to other E&Ps remains a major part of Propell’s business model. And it will have a critical role in North America’s continuing oil boom.

It’s not a substitute for fracking, but it is a way to get more oil for less cost – and less pollution – without additional drilling.

At the very least, it will help re-energize existing fractured wells and extend their productive lives.

Drilling fewer wells is more efficient, cheaper and cleaner.

According to Zion Research, the market for enhanced oil recovery is forecast to grow at a compound annual rate of more than 25% – set to reach $225 billion by 2020. So the opportunity is there.

And as the technology is applied in North America and around the world – PPT has been tested at only 400 wells so far, so it’s in the very early stages of development – there’s considerable room for adaptation and innovation.


TAGS: Oil, Gas, Hydrocarbons, Fracking


[formidable id=”19″]

Written by: David Dittman

Click HERE to Read Article From Publisher.

Houston 2016 VIP Ticket

Facebooktwitterlinkedininstagrammail