Print This Post
PetroBank Could Revolutionize Oil Sands
I own shares of PetroBank (PBEGF) for two reasons. First the company has been doing a credible job of buying and exploiting conventional oil and gas resources. In Q2 it reported diluted EPS of $1.92 ($C) vs. $0.26 based on 23.9k boe production vs. 6.9k in Canada and Colombia. Just based on those results, the companies $45 price per share seems well supported. But the main reason I own the stock is that the company has developed two related new technologies for exploiting deep deposits of heavy oil and bitumen that could have wide applicability around the world.
As reported in a recent Press Release, their Whitesands test well in Alberta succeeded in producing oil of an upgraded quality using a combination of their Toe and Heel (THAI) production and their Capri upgrading technologies. All the work is accomplished subsurface thus eliminating the need to mine and move material and vastly reducing if not eliminating any emissions. Moreover, the process eliminates the need for natural gas that existing sub-surface operations require. It uses the bitumen itself, combined with oxygen pumped into the well, to melt and refine bitumen into oil, which is then recovered to the surface.
The company needs to refine the process further, to prove that it can operate in volume, and to demonstrate the economics of the process in volume. Those tasks will take some time and involve some risks of failure. But since the apparent proof of principle just completed, the risks seem diminished. There seems little doubts that the potential rewards to PetroBank from both using its technologies to exploit its own considerable oil sands leases and through licence income could be very substantial if the technologies prove out as hoped.
Tags: peak oil energy investments
Print This Post
4 responses so far ↓
1 KV // Sep 26, 2008 at 12:08 pm
Jim,
If the process proves commercially feasible, it will free up so much natural gas that has been shut-in by Canadians for the purposes of processing bitumen.
Paramount Energy comes to mind as a possible beneficiery of such a process. There must be dozens of other gas producers.
2 paultaut // Sep 26, 2008 at 8:23 pm
one CanRoy by the name of Pengrowth(PGH) is building a pilot plant which would use steam rather than NG to extract oil from oil sands. Expected to be operational by mid 09. Since PGH is about 60-40% NG vs oil, the impact to its bottom line would be substancial also. I’m Talking about an Oil Company not a CanRoy but 15% while you wait is acceptable to me.
I saw the model for PetroBank’s extraction process. My only question is can it handle Commercial volumes?
3 KV // Sep 27, 2008 at 7:39 am
Jim,
I recall somebody was investigating microwave heating of the bitumen in situ to release oil. Microwave generators were to be powered by solar/wind energy.
I don’t know where this process stands, as it can apply to shale deposits all over the world.
4 paultaut // Sep 28, 2008 at 5:02 am
Lets think in terms of the oil costs involved in mining, transporting and only then heating the shale which would then have to be put somewhere. You have to be able to concentrate the released oil in order to extract it.
Shell had the idea of putting a 1,ooo or so pipes into the shale and heating those pipes to release the oil. The projected costs turned out to be so onerous that the project was shelved.
Oil prices must be much higher for either method to generate a profit. Concentration of the released oil is the key.
I may be wrong in my visualization, probably am wrong, but I would hazard a guess that the microwave method would have already been tested on Oil extraction from Oil Sands.
Leave a Comment