Majors Will Be Forced to Find Oil More Cost Effectively - SFD(R) At The Forefront

VANCOUVER, BC / ACCESSWIRE / December 4, 2014 / Soaring exploration costs and free falling oil prices are triggering oil majors to find cheaper ways of finding new reserves, including utilizing technologies like NXT Energy Solutions' (TSXV:SFD, and NSFDF:OTCBB) SFD(R). It's an aerial survey technology that can very quickly identify the best oil and gas prospects at a fraction of the cost of existing methods while significantly increasing the commercial success rate on exploration programs.

SFD(R) is a geophysical tool that detects anomalies in the sub-surface which explorationists can use to identify high-potential fluid traps, like oil and gas. It's a proprietary technology that has already impressed the likes of national oil companies in Mexico, Pakistan, and Colombia. Besides hitting the mark as a highly cost-efficient prospecting method, it's also environmentally friendly, as it has virtually no impact.

Top-Tier Clients: PEMEX, Pakistan Petroleum, EcoPetrol, Pacific Rubiales

Oil Exploration isn't a cheap business. Three oil giants Chevron Corp., Exxon Mobil Corp. and Royal Dutch Shell PLC spent US$120 billion in 2013 on exploration costs. Brent crude oil has continued its Autumn free-fall, now below US$ 72 after OPEC decided not to cut production. These figures don't mix well - soaring exploration costs and the oil price in a free fall. It's no wonder that the major oil companies are searching for more cost effective technologies to find new sources of oil and gas with.

One of those companies was Mexican oil giant PEMEX (Petroleos Mexicanos). PEMEX, Mexico's state oil company took on NXT Energy Solutions' Stress Field Detection under a 'blind test' in 2012 (read here). The US$ 415 billion oil company tested SFD(R) over 5 basins onshore/offshore and on a variety of geological settings known to have trapped fluid reserves. The technology successfully identified the vast majority of the 64 known reserve accumulations in the survey test - containing 3P reserves of 11,918.7 MMBoe (million Barrels of Oil Equivalents) out of 12,047.9. To put that in perspective it identified 98.9% of the $843 trillion worth of reserves in a $5.8 million contract. In addition, the test proved that SFD(R) had high correlations in identifying existing prospects that had been identified by seismic methods.

This illustrates SFD(R)'s capabilities as a valuable compliment to other technologies, particularly seismic, in order to locate or verify fluid traps. Not to mention the endorsement comes from a US$415 billion heavyweight.

PEMEX is not the only national oil company (NOC) to take an interest in SFD(R). NXT's Stress Field Detection technology has won glowing remarks from the Pakistan government, whose state-owned oil company Pakistan Petroleum Limited (PPL) was thrilled by the results of its initial use the technology, also in late 2012.

NXT Energy flew an aerial survey in the Balochistan basin in Pakistan, a frontier area with no previous seismic or other geophysical data coverage. As part of its exploration program, PPL also acquired extensive 2D seismic data over a large portion of the lands which were part of the SFD(R) survey. In mid-2013 PPL used this data to further investigate the area for the highest potential prospects, later publishing the results in late 2013 as a Joint Technical Paper at the Pakistan Annual Technical Conference in Islamabad.

"SFD(R) technology has been successfully applied by leading oil and gas companies in North America, Colombia and other countries. PPL is proud to be the first company to apply the technology in Pakistan."

PPL's Managing Director and Chief Executive Officer Asim Murtaza Khan

Other past survey clients include Pengrowth Energy (PGF:TSX), Renaissance Energy Ltd., Encal Energy Ltd., Pacific Rubiales Energy (PRE:TO) and British Petroleum (BP) (BP:NYSE) on a test in Colombia. The potential market for SFD(R) is global, and NXT is actively working to expand into new markets, and gain large new NOC clients such as those in Bolivia and south-asia.

In yesterday's conference call NXT CEO George Liszicasz mentioned that Boliva's NOC YPFB is interested in employing SFD(R) for extensive surveys in 2015.

SFD(R): The Right Tech at the Right Time

The notorious and soaring costs of exploration continue to weigh down on the oil majors and the fall of oil prices off a cliff with no near-term recovery likely demands solutions that can minimise the exploration risk.

2D and 3D seismic is an important feature of exploration but is hardly cheap in the range of $30,000 - $90,000 per kilometre, especially in frontier areas where the big oil discoveries are found. Also, while seismic can identify sub-surface structures, additional methods are needed to gain information on fluid properties. SFD(R) has many advantages, starting with flexibility; it can be used before seismic is implemented or after other methods have been used to add confirmation and accuracy.

SFD(R) can be used both on-shore and off-shore, it isn't affected by water depth or salt presence and has virtually no environmental impact. Plus, it doesn't involve a lengthy on-ground permitting process as seismic does.

Having already proven its capabilities to oil majors like PEMEX and PPL and having worked with BP for exploration studies, SFD(R) is clearly one solution to the cheap oil/need more discoveries conundrum.

NXT Energy has a relatively small share float, and a market cap of about $70 million.

SOURCE: Resource Reports