An oil and gas entrepreneur is aiming to use a bio degradable lubricant injected into ageing North Sea wells to help free up millions of extra barrels of oil.
And Paul Landers is so confident of success he offering a “no-win no-fee” deal to operators – if he doesn’t increase production, he’ll walk away empty handed.
Stimlite is part of the TNW Group – run by businessman Paul Landers, who once tried to buy Leicester City football club.
The firm specialises in well stimulation and uses radial jetting to penetrate formations by up to 100 meters, greatly enhancing the potential production of a well.
Landers said: “The low oil price has caused operators to cut new exploration and opex for the next few years by over $200.
“That means there’s an urgent requirement for greater rates of recovery – through well stimulation – just to keep production at a similar levels to recent years.”
“However, the collapse to less than $40 per barrel worsens the situation. A typical new production well drilled offshore costs about £250m per well and takes 6-9 months to complete from initial design to full production.
“By contrast, to restimulate an existing well to increase its production flow only costs about £100,000 and takes 1-2 days to complete.”
Stimlite is planning to clean out the wells using a product called Biosul and use radial jetting to break into new pay zones within the well bore.
Crude oil is very corrosive and contains sand and contaminants. Wells begin to clog up and production reduces over a period of time by as much as 50-75% within 10 years.
In order to return the flow back to full production, the wells need either coiled tubing with acid/nitrogen/Biosul or high pressure acidisation to clean the well bore and the perforation zones and thus increasing production by 30-70%.
“If we then use the same coil for radial jetting into new pay zones within the wellbore we can increase the production output considerably from 50-500% in suitable geologies,” said Landers.
Landers said operators remain reluctant to spend money on new projects.
The company will also use downhole fibre to continuously monitor the release of hydrocarbons into the wellbore as well as reservoir pressures.
StimLite is working with Well Services Group to develop a range of downhole tools to optimise treatment delivery and productivity increases.
Its downhole fibre-optics can be installed with WSG’s minicoil and provides the basis for several services such as identifying, targeting and improving underperforming perforation sets.
But what happens when Landers gets a result?
“We’ll take a percentage of the extra oil and gas production from a restimulated well for the first year.”
“For distressed small operators our income will be secured credit thus ensuring if the operator subsequently goes into liquidation we have first refusal on the sale of assets or taking over a complete field. A “win win” for all.
With regards to the Leicster City deal, Landers said: “It was back in the days when Martin O’Neill was manager. It didn’t work out, but they’ve done okay since then.”