Sleeping giant oilfields that were once thought mature and largely tapped out are getting a second lease on life with the latest in revolutionary enhanced oil technology: the futuristic-sounding Plasma Pulse Technology—a potentially billion-dollar business hitting the markets hard and backed by major investments.
Major strategic investors have been playing the enhanced oil recovery (EOR) market for some time, but a recent $15-million investment specifically in Propell Technologies Group, Inc. (OTCQB:PROP)’s Plasma Pulse Technology (PPT) gives us a glimpse of where this revolutionary tech is going.
The past few years have demonstrated that EOR is the savior of the North American oil boom, and the only thing that makes sense for producers who understand that operators have to be able to withstand price volatility.
Plasma Pulse Technology uses a series of impulse waves to reopen permeability for up to one year per treatment. Data from an average of 27 oil wells showed a 295% increase in initial production after a single PPT treatment, while an average from 36 injector wells showed a 545% increase of the amount of fluid after a single plasma treatment.
In an Oklahoma oil field, the application of PPT led to an amazing 1040% increase in daily well production—and that is just one of many successful plasma pulse case studies.
In addition to making wells more profitable, PPT enables the re-opening of wells without requiring water, without polluting chemicals, and without causing earthquakes. The technology doesn’t open rock like fracking; rather, it comes in afterwards and cleans up well bores to clear the pathway for oil to flow faster and more efficiently to the surface.
We’re looking at the immediate returns for this commercially proven method of getting more oil out of the ground, with the potential to double a well’s output by using PPT. This is exactly what investors today want to see from an operator, particularly in an atmosphere of depressed oil prices.
And the savings go far beyond the well. With anti-fracking sentiments at an all-time high, and new stringent regulations popping up, PPT offers a cheap and easy alternative.
10 Reasons To Keep Your Eye On Propell
1. Poised for major gains—and fast: We expect Plasma Pulse Technology to explode on the market first and foremost because it has proven to increase a well’s productive performance for up to an entire year for a single treatment that takes only a few hours to complete. It’s a fast and easy way to solve multiple problems operators have with wells, including oil production declines due to wellbore damage, clogging or fines migration and declining injector well volumes.
2. Making money on saving money: We also expect PPT to explode on the market because the technology allows operators to sidestep expensive, stringent new regulations. In California, a new anti-fracking bill and tight restrictions on injector well acid washing have a profoundly negative effect on key producers in the area, including Chevron (NYSE:CVX), ExxonMobil (NYSE:XOM) and Occidental Petroleum (NYSE:OXY). No one can afford the expensive and time-consuming permitting processes for each acid wash. PPT is a permit-free alternative to acid washing—saving money not only at the well but at the regulatory level. Time is money.
3. Nothing producers don’t love: There are no negative drawbacks here for producers: PPT has no negative effects on the casing string; all the equipment is highly mobile; it has a negligible environmental footprint and very low energy consumption; it does not require any heavy equipment; it can be rapidly deployed; and its low-cost application means that operators see an immediate return on investment.
4. From Russia with love, indeed: We’ve been following this technology since it debuted in Russia, where it has met with impressive success. In fact, PPT technology is licensed from Novas Energy—a venture capital-backed Russian energy technology company. What stands out is this fact: Russia does not have the same stringent regulatory environment for drilling that North America has; still, PPT—an environmentally friendly technology—has been the tech of choice for Russian injector wells. It’s proven effective and efficient and rendered it cheaper to get more oil and gas out of a well, regardless of environmental considerations.
5. Fabulous balance sheet: February was an exciting time for PPT, when it debuted in worldwide headlines with a $15 million investment. Propell is now fully funded and moving ahead at breakneck speed.
6. Secured market share: Propell has since moved fast to secure North American market share, with the formation of the new JV that now has the exclusive licensing rights for PPT for all of North America. The new JV—Novas Energy (USA) Inc.—was formed this summer with a $1.2-million investment by PROP, which has a 60% share. Its partner invested $800,000 for a 40% stake, and it also brings even more plasma pulsing expertise to the table.
7. Global potential: We believe this technology will go global with licensing after having secured the North American market.
8. Playing from both sides: Inside sources indicate that Propell has even bigger plans in store and that a sizable chunk of the $15 million investment could be used to acquire oilfields in which they would deploy their own PPT to increase output immediately. Watch out for moves to acquire a significant position in the U.S. oil sector.
9. Brilliant math: But in the meantime, we’re looking at the immediate-future numbers: The potential here is for the Plasma Pulse business to be worth $1 million a week in states with tough fracking and acid-wash restrictions.
10. Even more brilliant math: Looking at a JV that has the exclusive rights to North America—we’re looking at technology that could be worth billions.
By James Burgess of Oilprice.com
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