News21 Jun 2018 10:30
07:40 21 Jun 2018
HNR wants to start producing its own nitrogen so as to bring down the cost of its DT Ultravert technology, for which the gas is one of the largest cost inputs
men drilling a well
The next step had been to drill another well, but Highlands thinks it has found a clever way around this
Highlands Natural Resources Plc (LON:HNR) has reported “significant flow rates” from the Barret 1-14b well at its Kansas nitrogen project.
The well, which had been previous plugged, flowed at 1,769 thousand cubic feet per day (mcf/d) at 415 pounds per square inch (psi). The initial 15-minute shut-in was 920 psi.
No second well needed?
Highlands said it was “very encouraged” by the results. Gas samples have been sent for analysis to an external laboratory, but previously sampled wells in the area have exceeded 95% nitrogen.
The London-listed firm wants to test the Carlile shale at the project – a bit nearer the surface – and thinks it may have come up with a way to do this without having to drill a second well.
A nearby explorer is already in the process of drilling a well and Highlands is in talks to obtain some samples and valuable scientific data from these operations.
That would save time and money as the company would only be responsible for rig time during the sampling operations.
“The significant nitrogen flow rates obtained are very promising,” said chairman and chief executive Robert Price.
“We look forward to updating shareholders regarding the laboratory results. Nitrogen can be used for a range of applications and demand for it is strong. With this in mind, we are pleased with the interest received from a range of parties.”
Why nitrogen?
Highlands’ interest in producing nitrogen stems from its DT Ultravert technology which has shown it can restore reservoir pressure in both horizontal and vertical wells used in the ‘fracking’ process.
The process involves the injection of “significant quantities” of nitrogen gas into an existing well at the same time as a new nearby well is fracked. It is designed to prevent the older well from being damaged (known as bashing) by the new one.
READ: HNR looks to nitrogen for DT Ultravert technology
Highlands has enjoyed some early stage success in deploying the technology but is aware that the profitable and large-scale commercialisation of the service may depend on the company’s ability to improve cost efficiency – and nitrogen supply represents one of the largest cost inputs.
HNR’s thinking is that if it can start producing its own nitrogen, it will not only reduce the cost for its customers, but it will also improve its own margins and possibly create another revenue stream if it becomes a supplier in its own right.
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