Majors
Will Be Forced to Find Oil More Cost Effectively - SFD(R) At The Forefront
VANCOUVER, BC / ACCESSWIRE / December 4, 2014 / Soaring exploration costs and free falling
oil prices are triggering oil majors to find cheaper ways of finding new reserves,
including utilizing technologies like NXT Energy Solutions' (TSXV:SFD,
and NSFDF:OTCBB)
SFD(R). It's an aerial survey technology that can very quickly identify the best oil and gas
prospects at a fraction of the cost of existing methods while significantly
increasing the commercial success rate on exploration programs.
SFD(R) is a geophysical tool that detects
anomalies in the sub-surface which explorationists can use to identify
high-potential fluid traps, like oil and gas. It's a proprietary technology
that has already impressed the likes of national oil companies in Mexico, Pakistan,
and Colombia. Besides hitting the mark as a highly cost-efficient prospecting
method, it's also environmentally friendly, as it has virtually no impact.
Top-Tier Clients: PEMEX, Pakistan Petroleum, EcoPetrol, Pacific Rubiales
Oil Exploration isn't a cheap business.
Three oil giants Chevron Corp., Exxon Mobil Corp. and Royal Dutch Shell PLC spent
US$120 billion in 2013 on exploration costs. Brent crude oil has continued
its Autumn free-fall, now below US$ 72 after OPEC decided not to cut
production. These figures don't mix well - soaring exploration costs and the oil
price in a free fall. It's no wonder that the major oil companies are searching
for more cost effective technologies to find new sources of oil and gas with.
One of those companies was Mexican oil
giant PEMEX (Petroleos Mexicanos). PEMEX, Mexico's state oil company took on NXT Energy Solutions' Stress
Field Detection under a 'blind test' in 2012 (read here).
The US$ 415 billion oil company tested SFD(R) over 5 basins onshore/offshore and on
a variety of geological settings known to have trapped fluid reserves. The technology successfully
identified the vast majority of the 64 known reserve accumulations
in the survey test - containing 3P reserves of 11,918.7 MMBoe (million Barrels of Oil Equivalents) out of
12,047.9. To put that in perspective it
identified 98.9% of the $843 trillion worth of reserves in a $5.8 million
contract. In addition, the test proved that SFD(R) had high correlations in identifying
existing prospects that had been identified by seismic methods.
This
illustrates SFD(R)'s capabilities as a valuable compliment to other technologies,
particularly seismic, in order to locate or verify fluid traps. Not to mention
the endorsement comes from a US$415 billion heavyweight.
PEMEX
is not the only national oil company (NOC) to take an interest in SFD(R). NXT's Stress
Field Detection technology has won glowing remarks from the Pakistan government,
whose state-owned oil company Pakistan Petroleum Limited (PPL) was thrilled by
the results of its initial use the technology, also in late 2012.
NXT
Energy flew an aerial survey in the Balochistan basin in Pakistan, a frontier
area with no previous seismic or other geophysical data coverage. As part of
its exploration program, PPL also acquired extensive 2D seismic data over a
large portion of the lands which were part of the SFD(R) survey. In mid-2013 PPL
used this data to further investigate the area for the highest potential prospects,
later publishing the results in late 2013 as a Joint Technical Paper at the
Pakistan Annual Technical Conference in Islamabad.
"SFD(R) technology has been successfully applied by leading oil and gas companies in
North America, Colombia and other countries. PPL is proud to be the first
company to apply the technology in Pakistan."
PPL's
Managing Director and Chief Executive Officer Asim Murtaza Khan
Other past survey clients include Pengrowth
Energy (PGF:TSX),
Renaissance Energy Ltd., Encal Energy Ltd., Pacific Rubiales Energy (PRE:TO) and British
Petroleum (BP) (BP:NYSE)
on a test in Colombia. The potential market
for SFD(R) is
global, and NXT is actively working to expand into new markets, and gain large
new NOC clients such as those in Bolivia and south-asia.
In yesterday's conference call NXT CEO George Liszicasz mentioned that Boliva's NOC YPFB is interested in employing SFD(R) for extensive surveys in 2015.
SFD(R): The Right Tech
at the Right Time
The notorious and soaring costs of
exploration continue to weigh down on the oil majors and the fall of oil prices
off a cliff with no near-term recovery likely demands solutions that can
minimise the exploration risk.
2D and 3D seismic is an important feature
of exploration but is hardly cheap in the range of $30,000 - $90,000 per
kilometre, especially in frontier areas where the big oil discoveries are found.
Also, while seismic can identify sub-surface structures, additional methods are
needed to gain information on fluid properties. SFD(R) has many advantages, starting with
flexibility; it can be used before seismic is implemented or after other
methods have been used to add confirmation and accuracy.
SFD(R) can be used both on-shore and off-shore,
it isn't affected by water depth or salt presence and has virtually no
environmental impact. Plus, it doesn't involve a lengthy on-ground permitting
process as seismic does.
Having already proven its
capabilities to oil majors like PEMEX and PPL and having worked with BP for
exploration studies, SFD(R) is clearly one solution to the cheap oil/need more
discoveries conundrum.
NXT Energy has a relatively small share float,
and a market cap of about $70 million.
SOURCE: Resource Reports