The company is putting all bets on Grieve and selling down less attractive assets for cash, and to reduce committed expenditure. Suggest a capital raising is still close, as any cash from above is still minor.
50% of the Hereford’s 10,000 acre lease was JV’ed for say $300k. While nitrogen has a value, I guess that the costs of separation (presumably at a wellhead facility) and nitrogen transport (presumably not in a natural gas pipeline, so frozen, compressed and trucked), considerably outweight its by-product value. That’s the only reason I can think of to JV it for that sort of figure.
Grieve is interesting. Plenty of upside if it works. Has the company disclosed approximate operating chemical costs and the phase 1 capital costs? I've heard the $20m figure, but not sure if it's from the company.
From testing cores, Sutek Inc suggests 62.1% of the OOIP can be recovered (42.2% already via pumping and water flood, extra 20% with a chemical flood). This is right at the high end of the recovery scale and in practice there are very few fields in the world where 62% of the available field oil has ever been recovered. A little wary of that projection.
EOR is common in the US and has already been used on this field with a water flood. The use of chemicals (surfactants and polymers) is less common. In the US tighter federal EPA restrictions on pumping chemicals for fracture stimulation are underway, particularly in shallow wells. They’ll have to tolerate it though, because restricting the practice would reduce oil/gas production too much. Fracture stimulation uses a relatively minor volume of chemicals. Here ELK is talking about saturating a field (25% initially, different chemicals). Is anyone familiar with any tentative company timeframe to get environmental approval?
Thanks in advance for any answers.
ELK Price at posting:
18.5¢ Sentiment: None Disclosure: Not Held
