Metawells Oil and Gas Inc (PK)【KOSK】株式ニュース

https://www.allpennystocks.com/spotlight/1104/metawells-oil-gas-inc?

The world's thirst for energy remains strong, but traditional extraction methods have reached their limits. Enhanced oil and gas recovery (EOR) techniques offer a compelling solution. By employing innovative technologies, EOR unlocks additional resources from existing wells, extending production lifespans and boosts energy security, all while making sound business sense for oil and gas companies and investors.

And when done right, like with cutting-edge refining units, it is possible to slash methane emissions that are a leading cause of global warming.

Where to Start

There is no shortage of opportunities to coax more oil and gas out of a well. Across the U.S, there are an estimated 2-3 million abandoned oil and gas wells. Over 117,000 of these, scattered across 27 states, are "orphaned," meaning they're uncapped, unproductive, and have no identifiable owner to manage leakage or pollution risks.

According to Global Oil & Gas Recovery Corp., some wells are, amazingly, left with as much as 80% of the resource left in the ground. Usually, a well is abandoned when it is determined that the cost of extraction exceeds the price of the sale. So, when oil prices drop, so do operating well counts.

In 2019, the U.S. became a net exporter of energy for the first time in half a century. However, the U.S. remains one of the largest importers of crude oil in the world, which has proponents of energy independence arguing for more domestic production to meet global demand. The problem is that oil production is declining in the U.S., not increasing.

As shown by the EIA, the number of producing wells in the U.S. reached a high of 1,031,256 wells in 2014, then dropped to 919,246 wells in 2021 and then 912,962 in 2022. There are another 100,000 opportunities.

Making Money, Fixing Problems

On April 22, a quiet and mostly overlooked company, Metawells Oil & Gas Inc. (OTCPK: KOSK), a holding company in search of collaborations, released an important piece of news. The company said it inked a letter of intent to merge with Global Oil & Gas Recovery Corp. (GLOBAL), a takeover that will make GLOBAL a public entity.

The principals and the management team has been involved in the Capital Markets, Petroleum and Natural Gas extraction industry for over 25 years.

GLOBAL will capture and enhance the oil and gas reserves that were previously discovered but not fully extracted, alleviating production declines, through the deployment of enhanced secondary oil and methane gas recovery (EOMR) methods in the U.S. and Canada.

Further – and this is huge hidden value add – GLOBAL employs new technology that limits the environmental impact from methane release like the Mobile Refining Unit (MRU) developed and patented by PEnG.

Secondary Recovery is Primary Money Maker

Founded in 2023, GLOBAL is focused on deploying its EOMR technology in abandon oil and gas wells located in the oil-rich regions of Kansas, Colorado, Oklahoma, Missouri, New Mexico, Texas, Arkansas, and Louisiana. Its technology can enhance and increase production at a fraction of the cost of fully developed fields providing excellent return on investment.

There are three distinct phases of recovery standard to oil and gas production in North America. Primary extraction uses the natural pressure of the reservoir to bring resources to surface. Tertiary is where gas (usually carbon dioxide) or heat (steam or hot water) is used to stimulate oil and gas flow. Secondary implements other mechanisms, including gas re-injection and water flooding to further produce the remaining oil and gas after primary and tertiary techniques are no longer economically viable.

The is where GLOBAL has expertise.

Helping Climate Change; Cha-PEnG!

PEnG has developed the Mobile Refining Unit (MRU), a new green technology that captures leaking methane gas and converts it into usable fuel. This technology addresses the leaking abandon wells, sometimes called “zombie wells,” that are a major problem around the world. This technology is currently in development and could be ready for production in 2024.

PEnG has consulted dozens of start-ups and multinational corporations, including Total, Arkema, ExxonMobil (NYSE: XOM), Johnson-Matthey (OTC: JMPLY) (LSE: JMAT), Velan (TSX: VLN), Lavergne Group, Haldor-Topsoe, and more. PEnG's founder has worked for DuPont (NYSE: DD) in the United States, Spain, and Switzerland. In the U.S., he managed a laboratory to qualify 200,000 kilograms of catalyst for the commercial plant design, operations and technology marketing development. In short, he is highly experienced and successful in the gas-to-liquids process and has all the elements undergirding catalysis manufacturing, reactor design, operations, and scalability.

In 2023, PEnG and GLOBAL teamed up to address the flaring and abandoned oil and gas wells available in the U.S. and Canada.

Our Methane Problem

Methane is a powerful greenhouse gas responsible for around 30% of the rise in global temperatures since the Industrial Revolution; it is the second largest contributor to global warming after CO2. More than half of global emissions stem from human activities in three sectors: agriculture, waste and fossil fuels.

In the oil and gas industry, flaring occurs when excess methane gas is burned off at well sites rather than captured and used. Oil and gas companies flare more than $10.6 billion in natural resources every year. This practice, though sometimes necessary for safety reasons, wastes a valuable resource and contributes to climate change, arguably even more so than CO2 because it breaks down in the atmosphere faster.

GLOBAL and PEnG have an award-winning solution to help curb the pollution of methane that tends to leak into the atmosphere undetected from drill sites, gas pipelines and other oil and gas equipment. Last year, the group relocated the MRU pilot plant out of the lab and on to a trailer for oil field upgrades.

It is believed that the MRU can overcome all obstacles oil and gas companies face with CAPEX and OPEX that has held back this type of much-needed technology from becoming mainstream. Amongst other things, the MRU technology applies a catalytic partial oxidation step in a milli-second reactor that costs a fraction of steam methane reforming technology today.

The Revenue Estimates

Management estimates that it can produce the MRU for approximately $300,000 and sell it for $500,000 - $1 million, which should, conservatively, earn the oil and gas company customer a ROI of just 12-18 months and profits going beyond that (not to mention greener operations). The company estimates selling 60 units per year initially while expanding a constructing a factory capable of producing one unit per day.

The strategy also includes renting and partnering to get the MRUs integrated into operations. According to GLOBAL, “Rather than selling units, some junior oil companies have offered to share the production” if they can show production capabilities for shut-in wells.

If the unit can bring a marginal well back online and produce just 5 barrels per day of oil and 100 MCF (thousand cubic feet per day) of natural gas, the total revenues would be close to $500,000 per year. The orphan inventory Alberta stood at 8,000 wells several years ago. Assuming that 1,000 have this minimal capacity, total revenues would be $50 million annually to be split.

As far as renting, there is a compelling scenario in Canada where oil rigs are allowed to flare gas for 72 hours during well completion to evaluate the oil/gas in-place. Sometimes this is not enough time. Since the MRU is mobile, GLOBAL can bring the unit to the well head and convert the natural gas to diesel, which give reservoir engineers more data to estimate the productivity. There are about 750 oil rigs operating in Alberta alone. Assuming 200 rigs rent the MRU for 100 days per year, revenues work out to $3,000 a day, or $30 million per year.

Sometimes a short press release seems very unassuming, but in the case of Metawells and GLOBAL a closer look reveals a whole lot more.

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