Grandfather’s oil Fields
Lexington Energy Services Inc.
(OTCBB: LXES)
Alberta’s oil sands are not your grandfather’s oil fields. Spread out over an area the size of Florida, their tar-like bitumen is too thick to flow to a well like conventional oil and requires the input significant energy to coax it from amongst the sand before it can be upgraded or diluted for pipeline transport.
Historically, the scale of infrastructure and technology required, along with the low price of oil, left the oils sands commercially unfeasible.
Not anymore.
Technology and the price of oil have made Alberta’s oil sands very feasible. Companies like Lexington Energy Services that can offer technology to help to unleash the oil sands incredible reserves are well-placed to capture a piece of the very large investments pouring into Alberta.
In Alberta, oil is extracted from the oil sands using one of two methods: surface mining and “in situ” recovery.
Surface mining differs little from conventional strip mining and doesn’t involve any great leaps in technology. And besides, it is thought that only a fifth of the oil sands’ reserves are accessible by mining – most of it is simply too deep to be reached this way.
This is where in situ or “in place” comes into play.
Steam injection is the primary method currently used for in situ production, but there are a number of pilot projects testing other methods. Essentially, all these in situ methods involve heating up the bitumen while it is still underground so that it “melts” and can be pumped to the surface.
Currents estimates suggest that twenty percent of the recoverable bitumen is accessible to mining leaving the majority of the bitumen for in situ recovery.
Steam Assisted Gravity Drainage In Situ Production
Source: Pembina Institute
Alberta’s oil sands’ reserves are second only to Saudi Arabia and less than 3 per cent has been produced so far. What’s more, only a quarter of the oil sands are even under development. Designed in consultation of major oil sands players, Lexington Energy has built the next generation of drilling rigs for the oil sands. Aimed at exploring the 75 per cent of the oil sands that remain untouched, Lexington Energy’s new rigs small and fast rigs cut core samples from the oil sands, where conventional seismic exploration doesn’t work.
And Lexington Energy’s growth prospects are further bolstered by the fact that they can produce their rigs in months as opposed to the 1-2 years it takes to build conventional rigs in North America’s super hot oil industry.
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