LXES — Lexington Energy Services, Inc.
Stock Guru LXES Profile
Lexington Energy Services intends to take its share of the $36 billion Capital investment by the oil and gas industry in Alberta in 2006 which is expected to grow to $43 billion in 2007. Lexington has developed a mobile nitrogen generation unit. This is an example of cutting edge technology that makes Lexington an innovative company on this frontier of drilling for oil and gas.
The factor that motivated the Oil and Gas Journal to elevate the Canadian Oil Sands as the second largest oil and gas reserve in the world in 2003 was not that the oil sands had been discovered but that extracting oil and gas from the oil sands had become economically feasible. Lexington Energy Services by redesigning energy service equipment adaptable to the unique drilling requirements of the oil sands is supporting this march toward reduced recovery costs.
Recovery costs from the Alberta oil sands continues to be sufficient to support drilling and exploration. The cost required to recover and extract a barrel of bitumen and to generate a barrel of synthetic crude has declined to a level to the point that they are competitive with the costs of producing a barrel of production oil. In 1983 the unit cost oil sand production was nearly $40.00 per barrel by 2000 it has fallen to $12.00 per barrel Canadian or $8.00 per barrel U.S.
In 2004 this cost varied from $10.00 per barrel to $22.00 per barrel Canadian with the variation due to difference in oil sands project and the consumption of the rising cost of natural gas. The economics of reduced unit cost and higher oil prices has helped place oil sands development in a new context.
Mobile Nitrogen Generation
The Mobile Nitrogen Generation Unit designed and manufactured by Lexington is an example of new technology which is an intrinsic element of economically feasible oil sands recovery. For many applications, the conventional liquid nitrogen system is inefficient. It requires trucking thousands of gallons of liquid nitrogen from the point of production to a transfer station and then securing access to a field-pumping unit, which then has to travel to the location in the field where the nitrogen is required. Lexington has radically streamlined this process.
Lexington has designed a mobile nitrogen generation unit that can be transported to a site and generates a continuous supply of nitrogen — on location — without any of the additional costs associated with old-fashioned liquid nitrogen systems. These units extract the nitrogen from the air and purify it from its original 78 all the way to 98–99.5 per cent purity. And, unlike some other designs that top out at 95 per cent purity, Lexington’s system takes the next step and processes twice the volume of air to reach the critical minimum of 98 per cent pure nitrogen needed for many applications. And with their system’s simplicity, safety, and cost-effectiveness, there is no shortage of applications.
Alberta’s vast oil sands make Canada one of the few countries in the world with the ability to increase its longterm crude oil production and Lexington intends to be there for the longterm.
Lexington Energy Services by producing energy service equipment that is modified for oil sands production is supporting the reduced costs necessary for production from the oil sands.
Source: Lexington Energy Services Inc. and CAPP
CONTACT: Lexington Energy Services Inc., Mark Procknow, Investor Relations, Calgary, 1-877-279-4550
About Lexington Energy Services Inc.: Lexington Energy Services Inc. manufactures and leases innovatively designed oilfield service equipment. Through their wholly owned subsidiary, Lexcore Services Inc., we also provide a range of drilling services to meet the growing needs of the oil and gas industry, including Alberta’s oil sands.
Forward-Looking Statements: Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements. Actual results may differ materially from those described in forward-looking statements and are subject to risks and uncertainties. See Lexington’s filings with the Securities and Exchange Commission which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.
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