thank you for helping so many of us focus and understand the Oil & Gas opportunities that are here now. There are several good O&G companies on the table at fire sale stock prices only because they are victims of the small cap bear market and their own developmental stage of growth. HMGP and ALRY are prime examples.
I truly believe that a company like FSNR can help take EOR to the next level where the world needs to go now that the low hanging cheap fruit of easy oil production is gone. "PEAK OIL" IS HERE NOW.
Before the end of January, I think FSNR shareholders need to know more about the oil business so that they can fully understand the implications of what is happening in the industry and with their own investments. You, lowman, have greatly helped educate HEMI shareholders not only about their company but about the adversaries of any developing company: the business challenges of Kansas, the bashers, flippers and shorters who make it so easy to fail as an investor.
Here is my homework assignment for all interested in Freestone Resources. We will need to have a command of more than general concepts to evaluate our shares and know just when to sell a few shares- not too soon and not too late!
Heavy Oil: In conventional production, reservoir pressure from gas and water associated with the oil is generally sufficient to cause light oil to flow to a production well. If natural reservoir pressure becomes depleted, then oil flow may be enhanced by injecting gas or water into the reservoir to push the residual oil to the production well.
Historically, heavy oil was found incidentally during the search for light oil and was produced by conventional methods when economically feasible. However, to sustain commercial well production rates, heavy and extra-heavy oil production almost always requires measures to reduce oil viscosity and to introduce energy into the reservoir. When super-heated steam is injected into a reservoir, oil viscosity is reduced and reservoir pressure is increased through displacement and partial distillation of the oil. Steam may be injected continuously to form a flood or it may be injected in cycles so wells are used alternately for injection and production.
Extra-heavy oil commonly requires the addition of diluents (gas condensate, natural gas liquids, or light crude) to enable the oil to be transported by pipeline. Extra-heavy oil must also be chemically upgraded to reduce density and remove contaminants before it can be used as refinery feedstock. In recent projects in the Venezuelan Orinoco heavy oil belt, 1 barrel of diluents is required for every 3 or 4 barrels of extra-heavy oil produced.
Natural bitumen is so viscous that it is immobile in the reservoir. For oil sand deposits less than 225 feet deep, bitumen is recovered by mining the sands, then separating the bitumen from the reservoir rock by processing it with hot waters, and finally upgrading the natural bitumen onsite to a synthetic crude oil. In deeper oil sand deposits, where the bitumen is commonly less viscous, steam is injected into the reservoir to mobilize the oil for recovery by production wells. The product may be upgraded onsite or mixed with diluent and transported to an upgrading facility.
Having read the above USGS introduction, consider the following press release from AENP- not that FSNR necessarily has anything to do with AENP (I own no AENP stock): *************************************************************** American Energy Production Inc. Announces Operations Update of Wholly Owned Subsidiary Production Resources Inc. Thursday December 27, 2:30 pm ET
MINERAL WELLS, TX--(MARKET WIRE)--Dec 27, 2007 -- American Energy Production Inc. (OTC BB:AENP.OB - News) announced today its wholly owned subsidiary Production Resources Inc., (PRI) operations update.
Production Resources Inc. will have gross oil sales of approximately $426,000 at the end of 2007 as compared to $384,000 in 2006. Several factors contributed to this increase in oil sales. Number one is an approximate 10% increase in daily oil production. Number two is obviously the increase in the world price of crude oil. Number three is some new chemical treatments combined with new oil recovery methods that PRI is experimenting with.
Charles Bitters, President of American Energy Production Inc., stated, "We are very pleased Production Resource Inc. is aggressively seeking new ways to make the oil flow faster out of the Olmos Sand formation that covers the 1700 acres PRI has under lease in Medina County, Texas. Management has always maintained that if the Company can determine how to change the viscosity of the heavy oil there are millions of barrels of oil to be produced in the field. Joe Christopher, President of Oil America Group, another wholly owned subsidiary of American Energy Production Inc., and Earl Walker, President of Production Resources Inc., are working on a down hole formation heater that will heat the Olmos formation and change the viscosity of the 22 gravity oil. The new formation heater should be installed in the next few weeks."
Mr. Walker stated, "When American Energy Production Inc. acquired PRI we were selling our oil for $24.00/barrel and now we are selling oil for $75.00 to $84.00 a barrel. The price increase has allowed the Company to institute a plan to remove the old hollow rod pumping technology that many of the oil wells have in the field to produce the oil and begin installing 2 3/8" tubing and sucker rods that will not require as much maintenance on the oil wells and will be more efficient. PRI is reworking ten wells at a time depending on the availability of tubing and sucker rods. The Company believes this oil well reworking and experimenting with several enhanced oil recovery methods should enable PRI to greatly increase oil production in 2008." ***************************************************************
I leave everyone with this thought:
WHAT IF THERE IS ANOTHER TECHNOLOGY THAT IS BETTER THAN STEAM THAT CAN BE USED IN CONJUNCTION WITH NEW EOR "CHEMICALS" TO UNLOCK HEAVY OIL? WHAT WOULD THAT BE WORTH TO THE WORLD IN THE COMING YEARS?
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