Enhanced Oil Recovery

Carbon Dioxide

CO2 can also be used to increase the productivity of wells and we were delighted to expand our enhanced oil recovery portfolio through the acquisition, at a minimal cost, of 46,000 acres in Apache County, Arizona of an area believed to be prospective for commercial volumes of this gas. The area sits adjacent to land which was identified as a target for future CO2 production by Kinder Morgan, one of the leading suppliers of CO2 to the Permian Basin. In particular, Kinder Morgan had advanced plans to construct a $982 million CO2 project from Apache County to the existing CO2 pipeline network that supplies the Permian Basin. Although this project was not pursued following the oil price decline in 2015, we believe it is nevertheless a testament to the potential.

 

The directors have commenced discussions with a range of potential end users of CO2 to fund any drilling activity.