Many people may erroneously believe that oil wells siphon all the oil out of a reservoir. Not even close. Fact is, primary recovery only collects about 10-20 percent of the initial oil in place. It takes secondary recovery techniques to squeeze more oil out of the rocks, with rates often climbing in excess of 30 percent of the original oil in place. According to Permex Petroleum (CSE: OIL), innovative secondary recovery methods can further coax another 10-30 percent from a reservoir.
After completing the first phase of a modeling project on its Bullard property in Stonewall, Texas last month, Permex is now employing secondary, enhanced oil recovery (EOR) tactics to start gathering the oil that has been left behind on its properties. Permex is a Vancouver-based junior oil and gas company with assets known to host millions of barrels and cubic feet of oil and gas, respectively, throughout the Permian Basin of west Texas and the Delaware Sub-Basin of southeast New Mexico.
Permex is using an EOR technique called waterflooding, which involves injecting water into a reservoir for the purpose of building pressure and moving the oil towards receiver wells. While effective, an issue with using just water is that the waterflood can narrow as it extends across the reservoir. To minimize this effect and maximize recovery, Permex engineers controlled water flow from multiple injection wells.
The company is confident it can stimulate the wells to produce more oil based upon a completed study suggesting past water injection was extremely successful, producing over 100 barrels of oil per day within the Bullard field.
Furhtermore, Permex plans to also use leading-edge waterflood techniques, which include mixing the water with things like polymer gels and surfactants to increase the water’s density. Narrowing of the waterflood is eliminated with this method, effectively squeegeeing the oil towards the recovery wells.
Mehran Ehsan, president and chief executive at Permex, said in a press release that waterflooding in the targeted Tannehill formation provides “stable, increased light oil production with high gravity which fetch great prices at the wellhead.” Ehsan expects the waterflood to add to cash flow in the first quarter of 2019, which will support bringing all the company’s EOR-capable properties online and new drilling programs slated for the first half of next year.
