Kerm, Apologies for the length of message but is this technology everything they say it is compared to 3D seismic
THE COMPANY
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Amalgamated is an oil, gas, and gold exploration company with impressive
lease holdings and a newly-acquired exploration technology that makes
them an incredible prospect for growth. In December of 1996, just one
month ago, Amalgamated completed the acquisition of a one-man Texas
based exploration firm named MSP Technologies. MSP was acquired for
300,000 shares of AXPL stock. What makes a one man company worth $1.8
million dollars in stock? Good question.
THE ELECTROTELLURIC SURVEY
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MSP's founder, Mr. John Jackson, has developed a device called the
Electrotelluric Survey that quickly and accurately detects hydrocarbons
(oil and gas deposits) to depths of 17,000 feet. With this device, oil
and gas companies can eliminate their greatest expense: dry holes.
The Electrotelluric Survey is a low frequency telluric instrument used
to map hydrocarbons in the Earth's subsurface strata. The system
incorporates digital signal processing (DSP) software and acquisition
hardware. The survey can be run either digitally or analog, or on a
strip chart recorder for immediate field review.
MSP describes it's technology as, "The relationship between the
frequency of the electromagnetic wave front and the depth it will
penetrate a resistive Earth is generally accepted as the skin depth law,
often referred to as a piecewise continuous function of depth. Formation
activity, induced by ionospheric pulsations interacting with the
formation's dipole movement, results in scalar potentials, which in
turn, result in discontinuities in an otherwise homogeneously continuous
steady state output at the surface. The receiver detects these extremely
low level induced currents governed by the electrical properties of the
formation and records them in terms of the frequency tuned."
Here's our understanding of the technology: There are extremely low
frequency electromagnetic waves that pass naturally through the earth.
(These are the same waves that create the aurora borealis during certain
atmospheric conditions.) These waves develop anomalies or disturbances
as they pass through oil and gas deposits (hydrocarbons). The
electrotelluric survey measures these waves across a range of low
frequencies and records the anomalies, with each frequency corresponding
to a certain depth. The measurements are output in the field through a
pen recorder, or can be stored digitally for computer signal processing.
The result is a true hard copy with no interpretation needed.
Of course Mr. Jackson applied for patents on his invention, which were
subsequently acquired by Amalgamated Explorations.
According to Mr. Jackson, the telluric survey has been around since the
1940s when the Germans used it to search for submarines. Today, the U.S.
Navy uses a similar technique to map the ocean floor. But never has
anyone been able to identify the particular "signature" unique to
hydrocarbon deposits. The identity of this signature, in addition to the
survey's ability to scan rapidly through a frequency range (and
therefore, depth range) is what Mr. Jackson's patent application is all
about.
Why has it taken since the 1940s to develop this device? Mr. Jackson
states that, "Not until the age of the Pentium computer were there
electronic components reliable enough and sensitive enough to construct
the electrotelluric survey for hydrocarbons."
We reviewed the device during a June demonstration prior to
Amalgamated's acquisition of MSP Technologies. The survey not only
identified oil and gas deposits, but told how large the deposits were
and at what depth they were located. At commercial well sites where our
test team held the production logs, the electrotelluric survey matched
with 95% accuracy the known producing deposits.
The value of a device of this type is almost inestimable. Even with all
the advanced geological exploration methods and 3-D seismic surveys, 9
out of 10 wells drilled are dry or not commercially viable. Each well
costs between $100,000 and $1 million to drill and a run of bad luck can
ruin smaller oil companies. The electrotelluric survey could change all
that.
3-D SEISMIC vs. ELECTROTELLURIC
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The breadth and depth of potential application of electrotelluric
technology is simply staggering. Currently, the most widely accepted
subsurface exploration technique is 3-D seismic. This method surveys
subterranean structure, allowing geologists to identify areas that
display structure of a type that has traditionally been indicative of
potential hydrocarbon deposits. 3-D seismic DOES NOT detect the
hydrocarbon deposits, only structures that may or may not contain
hydrocarbons. Drilling test holes is still required to accurately gauge
the presence of commercial quantities of hydrocarbons.
The biggest problem with seismic, however, lies in the interpretation of
the data. This type of survey sends shockwaves through the earth, either
from huge mechanized "thumpers" that pound the ground, or from explosive
charges placed in the earth. The vibrations that result pass through
different densities of rock and can show desirable structure where none
exists.
Interpretation of the data gathered can require weeks of heavy
computer-driven calculations-even then, the interpretation is largely
subject to the skill and luck of the operator conducting the survey! Dry
holes can and do still occur, even with the best 3-D seismic operators.
Overall, 3-D seismic is an expensive, time consuming, labor intensive
process. But it's still a TEN BILLION DOLLAR BUSINESS!
Amalgamated's Electrotelluric Survey addresses all of these problems.
The survey equipment can be carried and operated by one man. The testing
itself takes approximately five minutes per location. There is no
disruptive pounding of the earth or underground explosions.
Interpretation is not part of the process-the survey accurately
discloses hydrocarbon deposits while still on the site. Varying
densities of the earth do not affect the survey, since the device
measures not vibrations but natural, passive, extremely-low-frequency
electromagnetic waves that pass through the earth. Off-premise number
crunching is not necessary.
Finally, the electrotelluric survey is environmentally friendly. There
is no disruption from this test except the footprints of one man. |
