Especially in Texas, hot out-of-the-shoot is the way that most start-up companies want to be thought of. They do their due diligence and make the business go right from the start. There is always a little trepidation when investing in a relatively new company entering an established market, but if its plans workout, there can be a tremendous profit upside.
USA Superior Energy Holdings Inc., an oil and gas exploration and recovery company, works to recover oil and gas from marginalized shallow wells through the use of new technological processes. The company is beginning operations in Texas and is planning projects in Virginia and Tennessee. During 2007, the company worked to build its corporate structure for operations by assembling an experienced team with over 50 years of experience in the oil and gas markets. It also researched and acquired properties where opportunity appears to exist.
The company’s first target property is located at the Bateman fields of Texas. After extensive testing, the company has announced that $122 million of oil at $85 per/barrel is anticipated. As the company fine tunes its nitrogen and horizontal extraction technologies, other possible targets will be addressed in a similar fashion.
What makes the company’s business model work is the remnants of oil left behind after initial drilling and extraction has taken place. In the past, only 15-30% of possible in-ground reserves were extracted given the level of technology used. In today’s technological world, the process of removing in-ground reserves has advanced to a point where the company can remove an additional 15-30% through the processes of nitrogen injection and horizontal drilling.
As the company has made projections based on $85 per barrel of oil, it does appear that it is ready to get up to speed fairly quickly. Its first wells have pumped approximately 1,000 barrels of oil in just the first half of April, with expectations that output will quickly move higher. USA Superior Energy has spent the time to get its corporate self in order and is primed to take advantage of rising prices at the pump.
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