Kensington Oil & Gas Offers New Hope for Legacy Oil Wells
By Paul Landers
CEO, Kensington Oil & Gas
A pioneering oil and gas company, Kensington Oil and Gas offers fresh hope and a radical, new approach to the growing problem of inactive oil wells in Alberta. The company is offering to re-open wells and make them profitable again – with no upfront costs.
Kensington claims that it cannot only re-claim original oil-production rates from inactive wells but that it can significantly increase production – so that wells are outputting at up to 800% of pre-shut in rates. And, says Paul Landers, CEO, we can do this within four weeks.
“We are looking at the escalating problem of clean-up in Alberta,” reports Landers, “and turning it on its head. We believe it is criminal to leave recoverable crude in the ground and then go and explore for new crude. Kensington is committed to taking these existing wells and giving them a new lease of life. And the best of it is – we can do this at no cost to the owners.”
Legacy oil wells are a growing problem in Alberta. The collapse of oil prices has left the province littered with thousands of inactive wells. Oil and gas companies are under increasing pressure to plug and abandon wells that are no longer producing. Once a well has been abandoned, the company is required to return the land to its original state, called ‘reclamation.’ However, each inactive well costs at least $50,000 to reclaim.
For companies with 10 or more oil wells this means potential bills of well over $500,000 to abandon their assets. Almost 45 per cent of Alberta’s oil companies no longer have enough producing wells to finance the clean-up of their inactive ones.
This isn’t just a problem for oilwell owners. As depressed commodity prices force operators into bankruptcy, the number of wells abandoned without proper clean-up expanded dramatically, doubling last year to 1,400 in Alberta alone. This puts taxpayers on the hook to pay landowners’ annual rents until the sites are properly reclaimed and property owners, forced to deal with failed leases and potentially hazardous wells, are seeking compensation in record numbers. There is a sense that this is just the beginning of a crisis.
Wells abandoned by failed operators become the responsibility of the Orphan Well Association, which cleans up the sites using funds collected from industry through a levy and other fees. However, the association is struggling to keep up with demand.
Until now, the focus has been entirely on cleaning up. The option of re-opening the wells has not been considered viable. This is because over time oil wells become clogged up and extraction becomes too costly. Technology research has been actively pioneering new tools and methods for extracting oil, but the solutions are expensive. Re-opening oil wells requires an integrated approach and a range of skills, expertise, and new technology which makes the process time-consuming and unrealistic.
Kensington officials believe our high-tech solutions can change all of this. We have the technical and industry resources to accurately assess whether an individual well can be restarted and made profitable again. If the assessment is positive, we can move on quickly to restore outputs and increase production through sourcing additional oil. “Our unique model means that we can discuss, plan, and re-enter a well within a couple of weeks,” Landers adds. “We can have wells producing at 800 per cent of pre-shutting rates, within one month.”
Kensington is offering to do this at no cost in return for a share of the output. “Of course, we only have finite resources,” says Paul. “So we must offer this on a first-come, first-served basis.”
It seems that oil companies who need these services would be well-advised to make early contact. However, if their model takes off, Kensington may offer a path to revolutionize the oil industry and bring hope for a new way forward to well owners, governments, and tax payers around the globe.
For more information please contact www.kenoil.co.uk.
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