chemical flooding

The type of chemical flooding that Grieve is apparently an excellent candidate for is alkaline-surfactant-polymer floods (ASP). Some key points:

Chemical flooding can be applied to any location as long as:
1) fluid/ chemical studies confirm that the field is a candidate
2) vehicles can haul equipment and chemicals to the site.

No connection to a pipeline or other infrastructure, as with Co2 flooding, is required = Lower cost of implementation.

Injection plant and chemicals for injection represent 95% or more of the total cost = Chemicals are a lot cheaper and easier to secure than C02.

Some successful ASP Flood projects and their recovery on original oil in place (OOIP):

Sho-Vel-Tum Field, Oklahoma (Test pilot)
-Cost per incremental barrel of oil was US$4/bbl making the project economical even when the price of oil was US$18/bbl.

Tanner, Wyoming 17%
- Total cost of chemicals, plant and engineering was US$5.85 per incremental barrel of oil recovered.

Daqing, China 23.9%
- Cost per ton of incremental oil was US$5/bbl

Taber South, Alberta
ASP increased oil production from 300bbl/day to 1502bbl/day.

West Kiel, Wyoming 34.4%

Gudong, China 29.4%

Cambridge, Wyoming 26.8%

Karamay, China 24%

Viraj, India 24%

Based on the above, the cost of chemical flooding is clearly a lot lower than C02. Surtek even stated in their report that Phase 1 of the Chemical Flood was commercially attractive even at the oil price of $40/ bbl (Oil just passed $70/bbl today).

Phase 1 will recover between 2.8 to 3.7 million barrels thus inferring 11.2 to 14.8 million barrels for the whole field. If Chemical Flooding is commercially attractive even at $40/bbl, being extremely conservative, just the difference between the long term price assumption of $60/bbl and $40/bbl will provide a return of $224 to $296 million over the life of the project. My numbers are very simplified as I could not find details of the cost of capital, life span of the project etc but when you compare the numbers with yesterdays market cap of $9 million...