EER’s business model includes three main revenue streams.
Primary Revenue Stream - Marketing to “Exhausted Wells"
An average oil well only extracts between 30-35% of available crude oil – the remainder is unattainable, or not profitable to obtain, because of composition, or paraffin content, which can make it uneconomic to refine into usable petroleum.
The BRR™ process is an enhanced microbial recovery system (MEOR) which uses bio-surfactants and “live” concentrates to breakdown the restrictions to mobilization, and treat substances like sulphur and paraffin that can restrict the value of further oil extraction. The market for this technology and formula on exhausted wells is immense.
Heavy crude oil reserves in “exhausted” oil wells represent over a trillion barrels of converted conventional crude – with the current price of over $90/bbl, this represents a minimum of $90,000,000,000,000 in currently undrillable crude.
Oil Production – an increasing demand to re-stimulate production:
- There are over 1 million oil wells in over 70,000 oil fields with significant reserves un-utilized, representing over a trillion barrels of converted conventional crude if it was drillable
- 90% of the oil produced comes from wells that are over 20 years old, and 70% from wells that are over 30 years old
- For every four barrels used, only one new barrel is found and therefore there is an ever-increasing demand for enhanced techniques for recovery of crude oil from currently “exhausted” oil wells
The BRR™ process is approximately $12/bbl, in addition to ingredients, delivery and engineering – this is significantly less than new resource discovery, and is usable for land and well owners that are sitting on unobtainable profits.
Secondary Revenue Stream -
Position and Sell as an Environmental Alternative to Hydraulic Fracturing or Fracking. Fracking is a process in which water, sand and chemicals are shot underground to break apart rock and free trapped natural gas.
The chart above shows the current expansion of the US fracking market – with fracking wells growing from 13,355 to 45,400 over the last year alone and a market expansion of 2300% over the last ten years.
EER Ltd will systematically market to companies using fracking technologies, offering the use of biodegradable active ingredients over chemical additions to frack water.
Oil consumption continues to rise around the globe, and while developments in energy efficiency progress to temper climate change and equalize supply and demand of this limited resource, the fossil fuel market will continue to be extremely luctrative for the foreseeable future...
EER Ltd is poised to be the solution to pave the way for policy and public acceptance of advanced drilling methods as a biodegradable alternative to the chemicals used in fracking, in addition to making new reserves accessible that were otherwise thought too expensive to drill.
The domestic energy demand trajectory is positioned steeply upwards, with enormous financial opportunity. The trajectory changed course because of technological advances, with the environment standing as the looming policy and public barrier. The environmentally friendly characteristics of BRRTM positions this product to capitalise on strong consumer sentiment around environmental issues and especially fracking.
In addition to fracking and exhausted wells, there are huge untapped resources waiting on policy decisions to steer drilling efforts. Most significantly, the California Monterrey Shale is believed to have 15.4 billion barrels of crude that can be drilled by enhanced recovery methods, and the state’s environmental regulatory entity is making decisions now on accepted drilling methodologies, while corporate entities weigh options on extraction.
Investing with EER Ltd is an opportunity to invest in the oil market at a time when these circumstances are converging. This is a conservationist profit model staking a claim in the immense potential of US oil, the future of the environment while selectively choosing international business partners.
The EER Product range of microbial enhanced oil recovery (MEOR) includes solutions for:
1. Oil Fields
- Remediation of existing heavy crude
- “Cleaning” of in-situ equipment
- De-paraffining etc
3. Pipe Lines
- Spill management and cleaning of oil-lines, pipes, and infrastruture
- Improved oil transmission along pipe-lines
- Less energy costs / more efficiency / faster flow
4. Land and sea oil slicks
- Ecologically safe, bio-degradable products specifically tailored for sea-born or land-in filtered hydrocarbon-based spills
5. Other Oil Industry Pollution clean-up: Any hydrocarbon-based spills. i.e.:
- Transformer oils
- Pipe-line breaks
- Industrial areas using oils and fuels
- Storage tank cleaning and remediation
- Tanker ship bunker remediation
6. Certificates of Conformity & Approvals
- (USA) FEMA-approved
- (California) EPA-approved
Where can it be used?
1. Anywhere that the oil production yields are reducing – due to…
- reduction, or loss, of natural pressure
- reduction, or obstruction, of remaining oil reserves
- environments where production could be enhanced by cleaning/clearing infrastructure, reductions in porosity due to build up of paraffin or scale superior enhanced recovery method.
2. Any field where the infrastructure is still in place…
- as a value add to the Fracking process
3. Most fields where peripheral wells offer an injection capacity…
- allowing for sweep of the oil towards central extraction point/wells heat in the well is below 200 C
EOR (Enhanced Oil Recovery) is an enormous investment opportunity, with total global EOR recovery potential estimated to exceed 750 billion barrels of oil.
The Middle East has the greatest EOR potential with over 475 billion barrels of recoverable oil.
The U.S. DOE estimates that the U.S. has reserves of 100-160 billion barrels of stranded oil that could be recovered (equivalent to 35 years worth of crude oil imports at current levels).
Similar stranded oil extraction opportunities exist in Asia. Since the oil targeted for EOR is located in wells that have already been drilled, exploration risk is virtually eliminated. Effectively, depleted oil reserves can dramatically increase in value with EER's abundant, low-cost BBR TM process, which unlocks a large reserve of EOR producible barrels.
Crude oil production through conventional methods is only able to capture about 20-40 percent of the original oil in reservoirs. However, using EOR enables the recovery of between 60-90% of the reservoirs oil.
The use of CO2 for commercial EOR is an established oil recovery method that began in the United States over 30 years ago. There are now over 120 registered CO2 floods worldwide. However, limited supplies of naturally occurring CO2 and high costs of CO2 production, compression and transport have, to date, limited the wide utilization of EOR. Power plants generate large streams of CO2 from combustion of fossil fuels, but the cost of post-combustion capture remains very high and the technology is not yet commercialized.
MEOR (microbial) methods such as EER's BBRTM process, can achieve the same or better results for a significant saving per barrel, making it a highly attractive alternative with almost unlimited capacity to expand it's market into a multibillion dollar industry in the future.
The key personnel of EER are:
Gary Davis – Founder, Executive Chairman & CEO
Gary has over 30 years experience focussing on the commercialisation of early stage companies throughout Australia, the US, the UK and the Asia Pacific region.
He has participated extensively in investment review committees for groups such as Souls Private Equity Limited, Kamisha Film Limited and Capital Finance Corporation Limited.
Gary has extensive experience in driving early stage companies to profitable exits for investors, having established extensive support relationships in the USA with VCs, Broker Dealers, Investment Bankers, Corporate Advisory and Legal organizations.
Nicholas Union BA, MIPS – Founder, Executive Director, Chairman of Advisory Board
Nicholas graduated with a B.A in Economics and Politics, and has over 30 years experience as a successful entrepreneur in media, entertainment, production and international trading.
He was awarded a Masters Degree in International Policy Studies by LaTrobe University, Melbourne in 2010. In recent years Nicholas has worked for Political Media (Australia) Ltd (a company founded by Gary Davis) as a consultant and advisor on policy and marketing strategy.
His role with Enhanced Energy Recovery Inc is to Chair the Advisory Board and advise the Management Board on policy and business development in the international context.
Mike Loftus – Director
Mike Loftus has been involved with start-ups for over 20 years. His senior leadership roles with young companies, has resulted in six of those ventures being acquired by Radius, Agency.com, Texas Instruments, Microsoft, IONA and AT&T for a cumulative USD$380M.
Mike is CEO and Founder of The Glue USA, which advises early stage companies while also mentoring Australian companies through the ANZA Technology Network, helping create the next generation of entrepreneurial leaders through SAGE Global.
Mike has earned degrees in business and computer engineering from Rochester Institute of Technology, completed the Executive MBA program at Stanford University and completed the Franklin Covey Leadership Program.
Malcolm Beville – Director
Malcolm is a former Macquarie Group banker and co-founder of the SMILE Foundation (Supporting Medical Innovation for Life Enhancement); a charitable children’s medical foundation. Malcolm has held directorships of both private and public companies. He has experience in strategy and implementation from early stage through to full commercialisation for a number of venture capital projects ranging from funds management to biotech businesses. The Beville Group has recently focused on owning and managing shopping centres such as the Marrickville Metro, sold to AMP and the repositioning of the Darling Harbour Harbourside complex subsequently sold to Mirvac for some $250m. Malcolm holds a BCom (UNSW) and completed a Masters in Counselling and Psychotherapy.
Professor Ibrahim Banat, BSc, PhD, CBiol, FIBiol – Scientific Advisor
Professor Ibrahim Banat is a Professor of Microbial Biotechnology. He completed his PhD at the University of Essex (UK) in 1982, and has over 30 years’ experience in industrial microbiology and its biotechnical application in research, industrial and academic establishments in Kuwait, the United Arab Emirates, Italy and the UK. At present, Professor Banat holds a Professorship Chair at the University of Ulster (UK).
He has participated in numerous research projects supported by academic, research and industrial establishments. In addition, he has published over 175 papers and review articles in peer reviewed international scientific journals worldwide.
His main areas of interest and expertise are microbial bio-surfactants’ production and biotechnological and industrial application, microbial enhanced oil recovery, bioremediation, fermentation and biofuel production.
Associate Professor Steven L. Bryant BE, PhD Chemical Engineering - Scientific Advisor
At the University of Texas, Austin, Dr Bryant holds the J. H. Herring Centennial Professorship in Petroleum Engineering and the George H. Fancher Centennial Teaching Fellowship in Petroleum Engineering. He earned degrees in chemical engineering from Vanderbilt (B.E.) and from UT-Austin (Ph.D).
He worked in industry research centers at BP and at ENI for a decade before taking a research scientist position at Rice University, then joining UT-Austin in 2002. Dr Bryant’s research interests range from grain-scale models of geologic processes to the role of methane hydrates in the Earth’s carbon cycle.
He has published more than sixty papers and one textbook with applications in production engineering, reservoir engineering and formation evaluation. He served as Distinguished Lecturer for the Society of Petroleum Engineers in 2001-2.
Richard Hobson, LLB, BA, MBA - Corporate Governance Advisor
Richard is an experienced business adviser and director with over 30 years experience as a commonsense commercial lawyer. He founded Linchpin Legal Management Pty Ltd in 2006 as a legal business advisory service specialising in corporate governance, risk management and compliance as well as general commercial law. Richard has been Company Secretary and General Counsel for a top 100 ASX company, with operations in Australasia, North America, Asia and Europe.
He has had various management roles in other public companies and has been Chief Executive Officer of a medium-sized law firm where he undertook a wide-ranging change management program.
A person of professional standing, integrity and intellectual authority, Richard has considerable experience in a wide range of commercial law areas, including corporate governance, company law, trade practices, risk management, contract law, employee share plans, finance and securities. He is on the Committee of Australian Corporate Lawyers Association - Victorian branch (ACLA) and represents ACLA on the Department of Justice’s Civil Procedure Advisory Group. Richard is also a member of the Law Institute of Victoria (on the Trade Practices Committee) and a member of the Australian Legal Practice Management Association.
Larry Jackson - International Development Advisor
Larry has over 25 years’ experience in International Business having worked for a number Private and Publicly Listed Multi-Nationals in Australia and Japan.
Having lived and held Senior Management Positions in Australia, Asia and North America and lead Global Trading Operations, Larry has extensive hands on operating experience in managing end to end Multi-National Business Units in complex markets.
He has completed Post Graduate Studies in Management at Melbourne Business School – University of Melbourne.
Dr. Barry Ferrier B.A., B.Litt (Hons.), Dip. Mus. (Comp.), Dip. I.T. - Media Consultant
Barry supervises the implementation of all marketing material, and he designed and manages the website for EER.
He was previously Assistant Professor of Multimedia at Bond University.
Barry is advising the board on IT integration and internet optimization strategies.
Based on EER’s research, there are three main competitors to the BRRTM Process:
- Ongoing new discoveries of oil reserves;
- The use of steam to recover heavy crude oil from exhausted oil wells, employed primarily by the major oil companies; and
- The use of selected specialised nutrients to increase oil mobilisation and movement employed by a US company called Titan Oil, Inc.
The Competitive Advantages of the BRRTM Process v New Oil Discoveries
The BRRTM Process has the following major advantages over new oil discoveries:
- The last major oil fields to be discovered were the Alaskan North Slope (1967), Siberia (1968) and the North Sea (1969) * ;
- Between 1967 and 2005 the world’s largest oil producer (Saudi Arabia) conducted intense oil exploration and discovered only one significant oil field * ;
- There are 58 countries producing less oil today than in the past due to the fact that they have made no major new oil discoveries * ;
- The only region of the world where oil production has not peaked is the Middle East.
( * Source: A Crude Awakening – The Oil Crash (2007));
The Competitive Advantages of the BRRTM Process v Steam Recovery
The BRRTM Process has the following major advantages over the use of steam for the recovery of heavy crude oil from exhausted oil wells:
- It can be adapted to the various states of the heavy crude (eg: high sulphur content) to ensure that the recovered oil requires as little further refinement as possible;
- It does not require the construction of the costly new infrastructure for steam recovery;
- It does not require the massive amounts of energy required to produce the steam that is the foundation of the steam recovery method;
The chemical surfactants used in steam recovery have inherent environmental risks, and are vulnerable to heat and pressure.
The Competitive Advantages of the BRRTM Process v Titan Oil and other MEOR Processes.
Increase oil mobilisation/movement
Increase oil recovery by improving water flood sweep efficiency
Decrease the percentage of water content in recovered oil
Increase oil recovery by reducing the surface and interfacial tensions of oil
Increase oil recovery by enhancing oil degradation to reduce viscosity
Increase efficiency of oil recovery by plugging large spaces and increasing pressurisation
Increase oil recovery from oil sands
Enhanced Energy Recovery Inc.
Titan Oil represents the closest competitor to the BRRTM Process, business model, and primary target market (being the USA). It’s potential and, by association, that of EER was described by 321gold founder Bob Moriarty in a recent interview with The Gold Report as:
My very favourite company right now …. It will be the Google of investing. It’s a company called Titan Oil Recovery Inc. …. In the oil business, most oil gets left in the ground. …. This process (the Titan Oil process) is going to be worth many billions of dollars.
The key facts in relation to the worldwide oil market are:
- There are over 1 million exhausted oil wells in over 70,000 oil fields;
- The last major oil field discovery was the North Sea in the late 1960s (Source: A Crude Awakening – The Oil Crash (2007));
- 90% of the oil produced comes from wells that are over 20 years old, and 70% from wells that are over 30 years old (Source: The Looming Crisis In Worldwide Oil Supplies, E Hunter Herron, July 2000);
- For every four barrels used, only one new barrel is found (Source: The Looming Crisis In Worldwide Oil Supplies, E Hunter Herron, July 2000);
- The world has either passed peak oil or will pass it before 2036;
- The rapid industrial development of the Chinese and Indian markets will increase demand for oil dramatically over the coming decades.
The key facts in relation to the US oil market are:
- The US population represents 1 person in 22 of the world’s population, yet consumes 1 in every 4 barrels of oil produced worldwide;
- The US controls only 2% of the world’s known oil reserves;
- US oil production peaked in 1970 at 10.2 million barrels per day, and is currently less than 7 million barrels per day;
- There are over 285,000 exhausted oil wells in the US.
Business Model Premises
EER’s business model is based on the following key premises:
- As identified above, there is an ever-increasing need in the US for recovery of heavy crude oil from currently “exhausted” oil wells;
- Increasing worldwide demand for oil driven by China, India and the US will exhaust existing oil reserves faster than previously estimated;
- The BRRTM Process, combined with a crude oil price of at least US$90 per barrel, makes recovery of heavy crude oil cost-effective when compared to the cost of discovery and recovery of new oil reserves;
- Heavy crude oil reserves in “exhausted” oil wells represent over a trillion barrels of converted conventional crude;
- Capturing a small percentage of this enormous market is expected to generate significant revenues.
Revenue Sharing Per Barrel
The cost of discovering new oil fields is exorbitant. Kuwait has committed to spending US$3 billion (Source: Kuwait Oil Field, World’s Second Largest, ‘Exhausted’ by James Cordahi and Andy Critchlow, published by Bloomberg, 9 Nov 2005) to discover new fields now that its largest field has peaked. In the US, where reserves are fewer and more difficult to discover, the cost of finding new reserves is even more per barrel.
Accordingly, the exhausted oil well market in the US represents a potentially highly lucrative market where EER can price its recovery systems at less per barrel than the cost of new discoveries whilst generating significant revenue per barrel.
Based on the estimated cost of discovering new oil on the Atlantic and Gulf State coasts in the US, EER can price its recovery systems at an estimated US$12 per barrel (based on a crude oil price of at least US$90 per barrel) and still represents a more cost-effective alternative to the recovery of newly discovered oil.
Enhanced Energy Recovery Inc. has developed an environmentally friendly MEOR process that can potentially extend the lifetime of oil reserves significantly. This unique process, known as Bio Remediation RecoveryTM, takes advantage of the vast amounts of un-utilized oil reserves in most oil fields, which exist in the form of heavy crude, the thick sludge that exists at the bottom of oil wells. This represents more than half of the world’s “recoverable” oil reserves. Until recently, it has not been cost effective to recover this “heavy” oil.
Bio Remediation RecoveryTM uses an in situ microbial activity and bio-surfactants to not only cost-effectively break down the heavy oil, but to also remove impurities from that oil before it is recovered.
The unique BRRTM Process therefore not only potentially releases substantial value to investors in terms of previously unrecoverable oil, but may also significantly decrease the cost of refining that oil, dramatically improving a project's potential bottom line.