Indications have " DIGG " extracting oil from shale by the end of the year.
Dec. 9, 2005--Digital Gas, Inc. Ann Arbor, MI (OTC Pink Sheets: DIGG - News) announced today that it has signed an agreement to partner with a private US-based company (PRIVATCO) that owns the exclusive rights to a high temperature fuel cell (HTFC) method which is expected to dramatically reduce the cost for oil and gas recovery from a variety of unconventional hydrocarbon resources.
The broadly-patented HTFC approach is designed to make it possible to economically produce oil and gas from unconventional resources, such as oil shale, tar sands, heavy oil deposits, and coal bed methane, while producing electricity as a byproduct. Under the terms of the agreement, Digital Gas intends to make an equity investment in PRIVATCO, be responsible for drilling contract and funding matters on PRIVATCO-controlled properties, and will have the right to use the HTFC method on properties it acquires independent of PRIVATCO, subject to a royalty payment. Digital Gas expects initial HTFC units to be operational during 2006.
PRIVATCO is currently accumulating mineral interests in the vast oil shale reserves within the Green River Formation of Colorado, Utah and Wyoming. Their proprietary HTFC technology will subsequently be deployed to produce oil, other hydrocarbon products and electricity for sale into North American energy markets. PRIVATCO has already informed Digital Gas that on just one property of less than 2,000 acres that it owns the mineral rights to, 800 million to 1.1 billion barrels of oil are expected to be recoverable.
The environmental benefits of this breakthrough HTFC method are compelling when compared to other retorting, strip mining, energy and water consuming techniques for unconventional oil recovery. By producing oil and other hydrocarbons from a resource "in-situ", without significant air emissions or water usage, while simultaneously producing "green" electricity, this HTFC technology will be well received by those who seek to balance the growing demand for energy with environmentally friendly processes.
The contrast between the HTFC and previous geothermic approaches to unconventional oil production is clear: the Net Energy Ratio (NER), measuring the energy output in comparison to energy supplied, of the HTFC approach is superior to other approaches being pursued for unconventional oil recovery. For example, the estimated NER of the HTFCs for oil shale production is approximately 7 (i.e., 7 units of energy are produced for every unit used), whereas the in-situ production approach currently being investigated by Shell in the Piceance Creek Basin shale resource is claimed to have an NER of 3.7.
A leading national research laboratory of the U.S. Department of Energy has reviewed and endorsed the PRIVATCO HTFC approach, and is following through on its interest by working to form a partnership with PRIVATCO to develop the commercial versions of the HTFC technology. In addition, PRIVATCO is currently involved in detailed discussions with several major energy industry sector companies interested in using this advanced technology for enhanced oil recovery for oil shale, oil sands, coal formations, as well as depleted oil fields.
According to PRIVATCO, their HTFC technology will not only be developed to liberate oil from shale, a resource estimated to contain two trillion oil-equivalent barrels in the US alone (equal to about eighty years of world oil supply at current annual consumption rates), but can also be developed to allow the major oil-producing companies to take a second look at properties now considered to be non-commercial. Depleted oil fields in the US and elsewhere still contain more than half of the hydrocarbons originally in these fields, because the residual hydrocarbons are too viscous to extract with conventional technology.
The HTFC technology can also be developed for application to accelerate and enhance recovery of coal bed methane, which has suddenly experienced a spurt in interest and production volume because of historically high natural gas prices. Digital Gas expects the HTFC system to dramatically accelerate production for coal bed methane companies. Since the HTFC produces electricity without any air emissions, their deployment will create the equivalent of emission free power plants. The electricity produced by the HTFC wells can be used to power pumps used in pumping water out of coal bed methane fields as well as powering compressors required to feed coal bed methane into feeder pipelines. The fuel cells produce a very pure carbon dioxide exhaust gas stream that can be either sequestered underground or harnessed for industrial or agricultural applications, such as the farming centers to be commercialized by a Digital Gas subsidiary.
With respect to the Canadian oil & gas market, which Digital Gas intends to enter, the HTFC system will allow for the commercialization of oil sands and oil shale formations that have too much overburden for open pit operations
