OIL WELL STIMULATION
Exploration and production, known as primary oil recovery, usually recovers only 5-15% of a given oil reservoir. The use of water flooding and other secondary recovery methods re-pressurize the formation and free another 5-25% of the original oil in place. This leaves an average range of 60-90% of the oil unrecovered. Tertiary oil recovery involves chemical, gas, microbial, or thermal processes, with chemical being a common and effective but expensive choice.
A Catawater® derivative has been used to treat two stripper wells, and oil recovery was enhanced in one. Two shallow oil wells in Oklahoma that were producing less than 1 bbl per day were treated. Significant additional flow resulted in one of the treated stripper wells (in excess of 12 bbls per day). No data was obtained for the second well due to well casing problems that were present before the test. Though the results were promising, additional testing is underway to establish degree and consistency of efficacy.
Catawater HHO Release, LLC identified two possible business models in this arena. The first is to act as a service company, treating the wells and sharing in the upside. CATAWATER® HHO RELEASE, LLC would provide the Catawater® derivative at low or no cost and negotiate a percentage (e.g., 20%) of the ‘Working Interest’. As an example of the annual revenue that could be generated by CATAWATER® HHO RELEASE, LLC if 100 wells that were currently producing an average of one barrel per day each increase average production to 5 bbls or 16 bbls per day, respectively, the respective potential revenue generated is as follows:
Assuming that CATAWATER® HHO RELEASE, LLC would establish partnerships by the third year for treating 8000 wells (only 2% of the US market), at an average increase of 8 bbl per day per well, and at an average price of $70 per bbl, CATAWATER® HHO RELEASE, LLC would generate approximately $327 million per year (assuming 20% sharing fee/royalty on the increase).
The second business model for CATAWATER® HHO RELEASE, LLC would require partnerships to be created and stripper wells acquired. This could be a more profitable model as CATAWATER® HHO RELEASE, LLC would control the Working Interests, but will require CATAWATER® HHO RELEASE, LLC to raise significant capital for lease acquisitions, well drilling and well operation, etc. To execute this model, CATAWATER® HHO RELEASE, LLC would be required to raise $25 to $50 million. The estimated annual revenue that could be generated by CATAWATER® HHO RELEASE, LLC for an acquisition of 100 stripper wells (price estimate $3MM), after investor payout, is as follows (Assume the treatment of 100 wells that are currently producing an average of one barrel per day):