AM Oil Resources and Technology

The primary goal of the Company is to use our patent technology to rekindle marginally producing oil wells to profitable levels. The Company holds the license to the technology, and the rights to market, the Portable Steam Generator System, the Portable Thermo-Gas Repressurizing System and the Deep Steam Generator technologies.

The units, used in conjunction with each other, or separately, are designed to recover more crude oil from wells that have historically produced oil. These technologies work by reducing the viscosity of the oil, allowing it to be produced more efficiently and provide pressure needed to drive oil through ground formations to the well shaft. Although major oil companies have used steam and gas technologies for years, the patented Meeks series extraction units provide portability and low cost of operation not previously available.

Targeting over 480,000 producing “stripper” wells in the United States, and hundreds of thousands of other wells worldwide the Company is ideally poised to ride the tide of rising global demand for oil. This will be obtained by providing an environmentally safe and cost-effect method of maximizing oil production from existing wells. Being the first to significantly market with this type of technology, should result in significant growth in both revenues and profits.

The average production of these stripper wells is less than 2.1 barrels of oil a day. Once the production of these wells dwindles below a profitable level, their operators are left with one of three options, either shut-in the wells, abandon the wells and cease production, or continue to produce at a loss. However, according to the U.S. Department of Energy, stripper wells, which have been pumped for 30 to 40 years with primary recovery methods, have yielded, on average, only 20% of the total amount of oil in the reserve. The remaining 80% will remain in the ground forever unless a secondary oil recovery method is employed.

Through the utilization of the Company’s innovative recovery technologies, it is possible to recover over 50% of the oil remaining in place, at increased production efficiencies.

What is a Stripper Well?

The Vital Role of Stripper Wells in the U.S.
For decades, a stripper well or marginal well has been understood to be an oil or gas well that is nearing the end of its economically useful life. "Stripper well" or "marginal well" are terms generally used to describe wells that produce natural gas or oil at very low rates—less than 10 barrels per day of oil or less than 60 thousand cubic feet per day of gas.

With the price of crude oil spiraling upward and the peak oil apex imminent, an interest in reclaiming untapped reserves in these stripper wells is becoming a topic of renewed interest, and the subject of the documentary video, "Independent Oil: Rediscovering America's Forgotten Wells," which was awarded a bronze award at the 28th Annual Telly Awards for 2007.

CNN ARTICLE ON STRIPPER WELLS

(CNN) -- Hundreds of thousands of small oil wells in the United Sates, called "stripper wells," are being touted as part of the solution to dependency on foreign oil.

Video http://us.cnn.com/2008/US/09/17/stripper.wells/index.html?iref=24hours

In the United States of America, one out of every six barrels of crude oil produced comes from a marginal oil well, and over 78 percent of the total number of U.S. oil wells are now classified as such. There are over 400,000 of these wells in the United States, and together they produce nearly 900 thousand barrels of oil per day, 15 percent of U.S. production.

(Article from www.Stripperwell.com )

Advanced Technology

Advanced Technology Conventional steaming involves a central stationary steam plant that provides steam to a number of wells. This method loses a majority of the thermal energy on its way to the reservoir. In contrast, our technology utilizes cyclic steaming as its method of steaming oil wells. Cyclic steam stimulation, or “huff and puff,” is a single well operation for crude oil enhancement. Steam/hot water is injected into the well for a period of anywhere from a few days to a few weeks, depending on the geological characteristics of the reservoir and the rate of return of the process. The well is usually returned back to production after a short soak period, in which the heat is allowed to radiate throughout the heated region.

Effective stimulation results from the injected heat and pressure that reduce the viscosity of the cold viscous oil contained in the reservoir, causing the oil to become considerably more mobilized and improving the efficiency of the pumping mechanism. The generator is set up within the allowable distance from the well, minimizing thermal losses normally associated with conventional steaming. Cyclic steaming is designed for wells 2,500 feet or less.

Steam flooding utilizing stationary steam generators is the most widely utilized method of steaming oil wells. This is an effective method of providing energy to push crude oil to the well shaft, allowing it to be pumped to the surface.

Billions of barrels of oil have been produced using this method over the last 45 years. The process utilizes a large stationary generator that provides steam for ten to fifteen (10-15) wells. The steam produced travels through a piping system to each injector well. The wells must be in close proximity to each other so that the heat will travel to the adjacent wells. This is a very expensive process because the centralized steam generator system, scrubber, water system and piping system cost over $1 million dollars to install. This cost does not include the pollution control device (scrubber) which costs hundreds of thousands of dollars maintain annually. In some cases, the produced steam has to travel long distances to the well, then down the well to the target zone.

Bio-Diesel Technology

Portable Biodiesel Technology

AM Oil Resources & Technology has completed design drawings to build a mobile bio-diesel device. The Company’s design is a mobile biodiesel production plant, capable of producing 2,000 to 3,000 gallons of biodiesel per week. The designed plant fits into a standard truck-trailer with dimensions 8 feet wide by 45 feet long by 9.5 feet tall.

Biodiesel is better for the environment because it is made from renewable resources and has lower compared to petroleum diesel. It is less toxic than table salt and biodegrades as fast as sugar. Since it is made in the USA from renewable resources such as soybeans, its use decreases our dependence on foreign oil and contributes to our own economy.

The company is preparing the mobile bio-diesel device for commercialization.

Portable Steam Generators

The Portable Steam Generator (MT-06), United States Patent Numbers 5,979,549 and 6,129,148 is capable of stimulating production from oil wells with known reserves. Many of these wells have fallen below profitable production levels and require enhanced recovery efforts in order to harvest their oil.

The portable, self-contained MT-06-10 is the subject of this venture. The 10 million BTU/hour systems is ASME approved and exceeds emission standards even within California, home to the most stringent air quality rules in the world. This trailer-mounted system is an attractive, cost effective alternative to the larger, cumbersome and unwieldy stationary systems currently employed to produce steam. There is no need for long and expensive piping to bring the steam to the wells, as the MT-06-10 can be set up in relatively close proximity to the wells. Thermal loss is also reduced due to the short distance which steam must travel.

The self-contained trailer-mounted MT-06-10 Portable Steam Generator system (image to the left) includes an electronic generator, high pressure water pump, a drum less hot water/steam generator, water system, and a computerized control panel. The unit is mobile and can be easily moved from well to well during a steaming.

What makes this technology different from other steam generators is that the water stays in a liquid state throughout the heating phase and flashing water into steam occurs outside the steam generator. Whereas, fresh water is the preferred choice, this design can even deliver treated produced water (brine) or even sea water into an oil formation. Because of this design water quality problems are eliminated.

Propane is the fuel of choice because of its mobility, and availability; however propane and/or natural gas can be used if required or available.

Four primary mechanisms are at work during steam injection:

(Studies have found that steam injection is highly effective in harvesting high-viscosity, low-gravity oil.)

In many cases, up to 80% of the oil in a formation may remain after 30 to 40 years of pumping. Without secondary recovery efforts, such as those using the MT-06 Portable Steam Generator, this oil will remain in the ground forever.

Full deployment of this technology could provide another solution to help the U.S. reduce it dependence on foreign oil. The process of steaming wells with devices that produce steam above ground is an excellent method of recovering oil in reservoirs that are shallower than 2,500 feet below ground. These methods have accounted for the recovery of billions of barrels of oil.

Steaming Technology Steam Injection for the Oil Industry

Steam injection is an increasingly common method of extracting heavy oil. It is considered an enhanced oil recovery (EOR) method and is the main type of thermal stimulation of oil reservoirs. There are several different forms of the technology, with the two main ones being Cyclic Steam Stimulation and Steam Flooding. Both are most commonly applied to oil reservoirs which are relatively shallow and which contain crude oils which are very viscous at the temperature of the native underground formation. Steam injection is widely used in the San Joaquin Valley of California (USA), the Lake Maracaibo area of Venezuela and the oil sands of northern Alberta (Canada).

Cyclic Steam Stimulation

This method, also known as the Huff and Puff method, consists of 3 stages: injection, soaking and production. Steam is first injected into a well for a certain amount of time to heat the oil in the surrounding reservoir to a temperature at which it flows. After it is decided enough steam has been injected, the steam is usually left to "soak" for some time after (typically not more than a few days). Then oil is produced out of the same well, at first by natural flow (since the steam injection will have increased the reservoir pressure) and then by artificial lift. Production will decrease as the oil cools down, and once production reaches an economically determined level the steps are repeated again.

The process can be quite effective, especially in the first few cycles. However, it is typically only able to recover approximately 20% of the Original Oil in Place (OOIP), compared to steam flooding which has been reported to recover over 50% of OOIP. It is quite common for wells to be produced in the cyclic steam manner for a few cycles before being put on a steam flooding regime with other wells.

Steam Flooding

In a steam flood, sometimes known as a steam drive, some wells are used as steam injection wells and other wells are used for oil production. Two mechanisms are at work to improve the amount of oil recovered. The first is to heat the oil to higher temperatures and to thereby decrease its viscosity so that it more easily flows through the formation toward the producing wells. A second mechanism is the physical displacement employing in a manner similar to water flooding, in which oil is meant to be pushed to the production wells. While more steam is needed for this method than for the cyclic method, it is typically more effective at recovering a larger portion of the oil.

Thermal Gas Injection

Thermal Gas Injection Third class of thermal technologies developed is a thermal injection technology. The device was design to take fuel burned through a complex chemical reaction then inject those combustion gasses into the oil formation to re-pressurize and assist with the recovery of crude oil. The injection of thermal gases (inert gas) works much like steam. The prime difference is that the combustion gases will not condense back to water as does steam. The CO2, CO, and N2 in the gases have properties that also aid in the recovery process.

In addition, the company’s gas injector is more cost-effective than steam and has greater applicability. For example, thermal gas may also work in formations with high clay content and other compositions where steam is not as effective or where water is not readily available.

The Thermal Gas Injection Technology

The Thermal Gas Injection (MT-08) is a portable thermal gas injector designed to directly inject inert flue gas into an oil formation to repressurize the formation and to decrease the viscosity of the oil, thereby increasing production. The MT-08 can deliver daily up to 1.3 million cubic feet of hot inert gas into an oil formation. The injection of thermal gases into a formation acts much in the same way as steam to stimulate the recovery of oil, except that gases will not condense into water. In addition, the carbon dioxide, carbon monoxide, and nitrogen in the flue gases have properties that also aid in the oil recovery process. The gas technology will provide the Company with the ability to service a number of wells on which steam may not be cost effective, i.e. those formations with high clay content or where water is not readily available.

The gas technology is designed to either work alone or in conjunction with the steam technology to improve oil production. For those formations where steam is effective, the system will increase the efficiency of the recovery, by increasing the gas pressurization in the formation, thereby assisting the oil flow. The unit provides a cost effective and more efficient manner to repressurize the formation through the injection of inert flue gas. In addition, flue gas may easily be combined with steam or water injection to increase oil production and recovery.

Although the oil industry currently utilizes steam and gas injection to increase productivity; the company’s steam and gas technologies are smaller, more energy-efficient versions of existing systems, produce ultra-low-polluting exhaust into the atmosphere and can be acquired and operated at a fraction of the cost of conventional systems. All allow for a lower cost of recovery than conventional thermal recovery practices and technology.