No. of Recommendations: 10
23%
I know...crazy. I worked in the oil business for all of my career. I'm sticking with the girl that first took me to the dance.
With CO2 EOR, OXY could double booked oil reserves almost overnight. If OXY can get others to pay them to dispose of their waste CO2 and then charge a premium for the produced "net zero" oil, the economics could be compelling. With current "conventional" CO2 EOR operators are paying over $2/mscf for naturally occurring CO2. The cost of sourcing, processing and transporting natural CO2 represents approximately 40% of operating cost.
There are multiple potential new productive reservoirs in the Permian Basin that could become economically productive. The deeper Barnett shale, long expected to produce mostly gas, has turned out to produce significant oil in the Midland Basin (sub-basin of the Permian). OXY have drilled a number of Barnett horizontals in the Midland that are rumored to be quite good. The enormous potential of The Barnett shale at least partly played a role in XOM's recent purchase of Midland Basin weighted PXD and OXY's arguably pricy recent purchase of Crown Rock.
I'm skeptical on OXY's moving into the Direct Air Capture of CO2, but at least they're laying off some of the cost on Black Rock and US. tax payers.
What is th oil price going to do in the long term? Who knows? Roll the dice...
