Heres the latest update sent out to subscribers of Alertline
Subj: 7/8/98 As promised "Nevtah the rest of the story"
Date: 98-07-08 14:46:52 EDT
From: alertline@aol.com
7/8/98
We have spent sometime talking to people we know in the oil business, more
time talking to Nevtah, and wanted to talk some more about why this company
is is more than simply an Oil and Gas play. I have to admit that a week
ago, I was not educated in Stripper wells. I was not alone, Rob thought it
was a place that you'd go on a Friday afternoon for beers.
A stripper oil well is classified as a well producing 10 barrels of oil or
less per day (shut in wells also fall into the stripper category) In 1996,
433,171 stripper wells produced more than 350 million barrels of oil, this
constitutes 15 percent of all the oil produced in the U.S. (excluding
Alaska). There are another 500,000 stripper wells not operating at this
time. Even at the current low prices of oil, this technology converts
marginal wells into an economic success. According to "The Marginal Oil &
Gas Report" 1997 Edition, issued by the Interstate Oil & Gas Compact
Commission.The average daily production of US Stripper Wells in 1997 was
2.22 BOD. Generally the approximate cost of producing stripper oil is about
$12.00 per barrel. Due to the fact that these wells are such low producers,
companies generally cannot make much profit, if any. Nevtah's stripper well
technology will considerably reduce the cost of producing stripper oil.
During the history of the oil industry, the two most popular methods for
lifting oil from wells are beam [sucker rod] pumping and gas lifting. Beam
pumping has a high initial cost but a relatively high efficiency at high
flow rates. Gas lift, with less initial cost, has the disadvantage of
requiring large quantities of high-pressure gas, both methods becoming
uneconomical when the formation flow drops, indicative of shallow wells.
Based upon the figures stated above, you can see that Stripper Well
Technology is not new or unusual, although stripper wells produce
considerably less than 20% of oil in the US. Stripper well utilizing
walking beam pumps comprise 80% of the wells being operated in the US.
Before going into Nevtah's Technology I feel it is important to mention
that the inventor of this system was awarded a grant by The Department of
Energy, further, The Department of Energy selected this system to undergo
field demonstration in the Teapot Dome oil field in Wyoming.
NEVTAH'S TECHNOLOGY
The Gas/Air Pulse Oil Pump is based on the application of low-pressure gas
to propel short columns of liquid water, oil, and/or gas wells under
controlled conditions. It will pump light, medium, and heavy crude oil. It
is primarily intended to pump shallow stripper wells from depths of less
than 2,000 feet. It is expected that this system can be modified to enable
it to pump fluids from depths of 5000 feet.
One version of this invention consists of a pump chamber down the bore hole
with a gas line extending from the surface to the chamber in the well and a
liquid discharging line extending from the surface to the chamber.
In operation, oil flows into the bore hole from the formation and passes
through a one-way valve into the pump chamber. When oil rises to a
predetermined level in the chamber, a sensor signals the solid-state
controller to supply low-pressure gas to the gas line, and this propels the
slug of liquid up the liquid discharge line to the surface. A sensor
detects the slug; the controller shuts off the inlet gas, thus conserving
gas. At this point, the oil from the formation fills the chamber again, and
the cycle repeats.
The system, employing a solar-powered computer, is currently pumping oil
from depleted wells having depths of about 1400 feet. The efficiency is
such that the lift energy cost per barrel is about 1 kilowatt per hour
(typically 10 cents).
After the initial pumping of oil from the well bore, sufficient well bore
gas is usually produced and compressed to be used as the motive source for
this gas lift system. Data indicate that 10 to 15 wells can be pumped at
similar depths, each producing a minimum of 1.5 barrels per day with a
single 3 horsepower electric compressor. In many cases, a gas-powered
compressor can be employed to eliminate any external power requirements for
the total lease.
The system does not require an attendant, and one compressor and computer
controller can serve several stripper wells. Shallow wells do not require a
work-over since two people and a winch can install the system. A prototype
telecommunications system has been developed to enable operators to monitor
remotely and control the pumping system from their central offices.
Equipment described above which makes this pumping possible is covered by
two United States patents.
OPERATIONAL BENEFITS
Energy savings are expected to be significant as stripper well pumping
costs will be lower compared to conventional gas-lift methods since this
invention optimizes the use of compressed air. In addition, because the
pump is easy to install and simple in construction and operation, low-cost
installation and maintenance will make it an attractive alternative for
stripper wells.
MARKET POTENTIAL AND STATUS
As we said earlier, shallow stripper wells pumping 2 to 10 barrels a day
and utilizing walking beam pumps comprise 80% of the wells being operated
in the United States today. For a number of reasons, this invention can be
considered an attractive option for replacement of the walking beam pumps.
The initial cost of the pump and its maintenance and operating costs will
all be low because of the simplicity in construction and because the pump
does not require an attendant. Furthermore, the pump can be installed
without a work-over rig and one solid-state controller and compressor can
monitor and serve a number of wells in an oil field.
GOALS
Initially it is NEVTAH's goal to take over leases of shallow oil wells and
to continually add new leases on which to install the pumping system. By
modifying the current system, a more economical system can be produced to
pump deeper wells.
$$$$$$$$$$PRODUCTION AND REVENUES PROJECTIONS$$$$$$$$$
The numbers become a bit staggering, it is very easy to see why we have
taken notice of this company. With 5000 wells at a very conservative
(national figure) of 2.22 BOD, Gross annual revenues would hit roughly $50
million. Estimated cost of production is about $8.00 per barrel including
leasehold and royalty payments.
With the current market cap of less than $3.5 million we think this is
certainly worth your strong consideration. |
