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Page 17 of 59

18 B A K K E N O I L B U S I N E S S J O U R N A L August/September 2015 ➤ continued from pg 17 DESIGN | FABRICATE | INSTALL| SERVICE 629 20th Avenue Southeast | Minot, ND 58701 701.852.0331 | 3521 Memorial Highway | Mandan, ND 58554 701.250.9696 | Additional locations in Fargo & Grand Forks, ND and Alexandria & St. Cloud, MN Lighted Signage | Pole & Monument Signs Awnings | Vinyl Graphics | Neon | LEDs Interior & Exterior Digital Displays Interior Signs | ADA | Digital Printing Express Graphics fargo | alexandria | bismarck | grand forks | minot | st. cloud Until Abramovich brought it to the world's attention, few had probably ever heard of Propell, which has a wholly-owned sub- sidiary called Novas Energy U.S.A, the licensee and developer of the PPT technology. The subsidiary licenses the technology from a venture capital- backed Russian energy technology company named Novas En- ergy, and the Russian connection makes sense here. After all, Plasma Pulse technology has been very successfully employed in both Russian producer and injector wells. More than anything, this Russian connection speaks volumes about the efficiency of this advanced EOR technology: Russia doesn't have draconian fracking regulations pressuring companies to use environmen- tally friendly technology. What this means is that it's cost effec- tive; otherwise Russians wouldn't be using it. Beyond the technology itself, if we follow Abramovich further we get a glimpse of what's about to happen on the U.S. EOR scene. In February, Abramovich took a stake with Propell, which was made through a Cyprus-registered company called Erving- ton Investments Limited. The February deal saw Propell raise $5 million from the sale of 1,525,424 shares of a preferred stock at $3.28 per share. The deal also gave Ervington the option to invest an additional $9.75 million, under the same terms, which it took advantage of on July 6. This Abramov- ich investment will be used to acquire oilfields with the overall aim to employ the new technology to in- crease output. You have to read between the lines here. Abramov- ich doesn't do anything small. He'll get the infra- structure in place and then look to acquire a sig- nificant position in the U.S. oil sector at today's fire sale prices to employ this EOR technology. If OPEC keeps oil prices below $100 for some time to come, the smart investor will be looking for something that captures long-term value, which means focusing on operational efficiency. So while many might assume that EOR is now too expensive to be supported during an oil price slump, a little counter-intuition tells us that this will change in the immediate future and investors will start looking at companies who are actually behind this new technology or the companies who are fo- cusing on using this new technology--whether it be CO2 EOR or PPT--to get more out of their oilfields. Over the long-term EOR makes production cheaper. And as Chesapeake Energy's (NYSE:CHK) Jason Pigott succinctly put it: "We can't control prices, so we have to focus on how much it costs to get it out of the ground." When low oil prices close doors, technology steps in to reopen them, and certainly innovation will drive the next U.S. oil boom—and the latest advance- ments are already commercially viable. The door has been re-opened. What OPEC knows is this: The U.S. has over 21 bil- lion barrels of oil that could be economically recov- ered with today's EOR technologies. And according to figures from the U.S. Department of Energy and the Western Governors Association (WGA), further advances in this technology could cause that figure to double. n Source: The-Second-US-Oil-Boom.html OPEC, get ready for the SECOND U.S. OIL BOOM Travis Dewitz -

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