Elk to squeeze Nebraskan oil field with Enhanced Oil Recovery method
Elk Petroleum Ltd (ASX:ELK) has acquired a large section of the Singleton Oil Field in Nebraska where it plans to tap the area’s remaining reserves using CO2 enhanced oil recovery (EOR) techniques.
Singleton Oil Field
The Singleton Oil Field has historically produced 10.9M barrels of oil, making it the largest oil field in the Panhandle of Nebraska.
ELK has carried out reservoir engineering studies that show a CO2-EOR project will have the potential to recover a further two to four million barrels of oil from an area known as The Singleton Unit.
ELK also has a water source in a well that will provide the site’s water injection which is needed for the CO2-EOR project.
Singleton Unit acquisition
The transaction date for the acquisition of The Singleton Unit has been set for 1 May 2014 and under the agreement ELK also has until the end of this year to decide whether it would like to purchase the adjoining Singleton Heirs well and lease the southeast of the Singleton Unit.
ELK plans to take CO2 from the Bridgeport Ethanol LLC plant, which is situated 40km from the Singleton Unit, and use this to recover any remaining oil in the Singleton Oil Field.
ELK has a purchase agreement with Bridgeport Ethanol entitling them to buy all of the CO2 fermentation emissions from the ethanol plant for the next 10 years.
The company is also processing a purchase of a CO2 pipeline that will run from the Bridgeport Ethanol plant to the Singleton Oil Field.
“The Bridgeport-Singleton project will be producing low-carbon-intensity oil, due to the biogenic source of the CO2 and this oil can be sold at a premium price into the California market,” says Scott Hornafius, ELK’s Chief Executive.
Further funding for Singleton project
ELK hopes to attract green energy funding for development of the site, as these funders have a mandate to develop energy that has lower CO2 emissions than conventional developments. The project will use a corn-ethanol source for its CO2, making the CO2-EOR process a carbon negative project.
A number of green energy funds in the US are being approached by ELK to offer the chance of funding the development.