On 27 May 2019, Fremont Petroleum Corporation (ASX: FPL) an oil and gas producer and developer, announced on ASX that the company received laboratory analysis results from an independent company- EMPACT Analytical Systems for the J.W. Powell Well which tested the produced hydrocarbons from the well 23-25.
EMPACT Analytical Systems Inc. undertook a crude oil assay and extended the natural gas analysis, which concluded that the oil and gas being produced from the Niobrara Formation is of substantial quality. Also, the company recently provided an update on Niobrara formation.
The gas produced from the formation demonstrated a high calorific value of 1,2021 British Thermal Unit (BTU), which in turn, increased the energy or heating value. The composition of natural gas includes most of the methane molecular component of 80.6 percent, and the rest of the composition contains 8.5 percent ethane, 5.3 percent propane.
FPL mentioned that the composition of the tested natural gas is consistent with the DJ Basin and the rest of the composition of the gas is as follows:
Tested Natural Gas Composition (Source: Company’s Report)
The condensate natural gas liquids in the produced gas were 2.3626 gallons per thousand cubic feet (MCF) excluding methane. As per the company, the heavy components of the produced gas could be further processed to gain value, and these heavy components are valuable as these gases yield 60% of West Texas Intermediate crude oil price.
The J.W. Powell well #23-25 is also producing a quality light sweet crude with an American Petroleum Institute (API) gravity of 34.8, and the samples contain no sulphur nor hydrogen sulphur.
The presence of such sulphur less crude oil if scaled up appropriately could push the company to jump in the race of sulphur less oil for sea transportation, especially after the International Maritime Organization (IMO) deadline to replace the sulphur crude in sea transportation has been reached.
The sulphur free oil gets no discount from the refineries and is currently in high demand.
The well initially flowed at 220 barrels of oil equivalent per day and is being about 80 percent gas and about 20 percent oil, Fremont is not planning to not produce from the well until it secures a first off-take agreement for the well. This step would preserve the valuable gas reserves in the well and avoid uneconomic flaring.
FPL mentioned that the infrastructure, which contains a gathering system and a processing facility, would be constructed to maximise the economic value and returns.
The company undertook the results of Powell well’s hydrocarbon to progress an off-take agreement for Pathfinder’s gas that is ongoing with local corporations and pipeline operators. These local corporations and pipeline operators have actively requested the company for the analysis of Powell’s hydrocarbon, and the priority of the company is to finalise its first agreement.
Apart from the natural gas, the crude assay also returned a noticeable value and results and marked the absence of any sulphur form, the composition, and physical & chemical properties include: Source: Company’s Report
The shares of the company closed at A$0.010 (as on 27th May 2019), down by 9.091% as compared to its previous closing price.
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