MGX Minerals Advances 110,000 Acre Petrolithium Project Paradox Basin, Utah
December 15 2017 - 8:30AM
InvestorsHub NewsWire
MGX
Minerals Advances 110,000 Acre Petrolithium Project Paradox Basin,
Utah
Vancouver, BC -- December 15, 2017 -- InvestorsHub
NewsWire -- MGX
Minerals Inc. (“MGX” or the “Company”)
(CSE:
XMG / OTCQB:
MGXMF / FKT:
1MG) is pleased to report that the initial ground survey
is nearing completion in preparation for a detailed 3D seismic
survey of its Utah Petrolithium project (the “Project”). The survey
of the Project includes approximately 9,000 source points. This
model will outline subsurface geological formations and structures
favorable for accumulations of oil and gas as well as lithium brine
bearing formations.
The Project is located next to the Lisbon Valley oilfield located
within the Paradox Basin, Utah which has shown historical brine
content as high as 730 ppm lithium (Superior Oil 88-21P) and past
production of oil exceeding 50 million barrels. The Company’s
cumulative Project land position comprises over 110,000 acres of
oil and gas leases and 118,000 acres of largely overlying mineral
claims, including 80,380 acres of unitized Federal, State and
Private lands within the Blueberry Unit (“Blueberry”) where MGX
controls the overwhelming majority of mineral claims. This
represents the first large scale integrated petroleum and lithium
project ever developed in the United States.
NFLi-5 Rapid Lithium Extraction System
MGX and engineering partner PurLucid Treatment
Systems (“PurLucid”) are nearing completion of the first
commercial scale rapid lithium extraction plant and are currently
in flow and pressure testing. MGX expects delivery and
deployment in January 2018 (see
press release dated December 6, 2017). This system is
capable of processing up to 750 barrels per day (120 cubic meters)
and serves as the commercial platform for the first 7500 barrels
per day (1200 cubic meters) now in fabrication. This technology has
been extensively tested in pilot plant phase since July 2017 on all
types of lithium bearing brine throughout the Company’s extensive
project portfolio including high hydrocarbon evaporator blowdown
(EBD) wastewater from SAGD oilsands production, traditional oil and
gas wastewater, traditional lithium brine, and high magnesium
wastewater concentrate from mine tailings among other sources
throughout North America. As MGX’s Paradox Petrolithium project
advances, systems will be deployed for hydrocarbon separation and
mineral extraction. The Project relies heavily on MGX-PurLucid
patented and patent-pending water handling and rapid lithium
extraction technology capable of processing complex brines in
conjunction with oil and gas development that produces a clean
water by-product aimed at mitigating water handling and disposal
cost and providing an innovative clean water solution to the oil
and gas industry. It has been suggested that Paradox Basin
unconventional oil and gas development has been hindered by high
total dissolved solids and water handling challenges and costs.
Integrated Petrolithium Engineering
Initial engineering studies have been completed by SigmaCubed of
Denver, Colorado modelling of simultaneous (brine / oil and gas)
production scenarios aimed at drawing brine and oil from a single
well. Reservoir simulations were run for the different scenarios to
determine the sensitivity of the results to the input assumptions.
There are three main variables – lateral horizontal length (feet),
net reservoir height (feet) and permeability (millidarcies). A base
case was run for a vertical well. Production rates (BWPD) were then
calculated for different combinations of these three variables. For
the purposes of this study, a 1,500-psi pressure differential
drawdown at the perforation interval was assumed. A pressure
drawdown across perforations can be achieved by various different
production methods (i.e. rod pump, gas lift, hydraulic pump, jet
pump, etc.). The study found that it did not matter how the
pressure differential is achieved, reservoir conditions will
ultimately determine production volumes. Also, for the purposes of
this study, the tubing size was limited to one case (2 7/8” O.D.)
primarily because the 2 7/8” tubing x 5 1/2” production casing
configuration is one of the most common wellbore configurations
utilized by the petroleum industry. Upon reviewing the results of
this study, it become increasingly apparent of the multitude of
variable combinations resulting from the study of just one tubing
size. The results of this study can be ratioed up or down to obtain
relative production volumes for 2 3/8” or 3 1/2” tubing
strings.
Produced water density, oil API gravity and water oil ratios were
found to have negligible effects on total production volumes. The
biggest effect these variables had would be in the fluctuation of
the producing fluid level in the wellbore. For the purposes of this
study, a full column of 100% petroleum brine water weighing 11.0
ppg was assumed.
Type of Wellbore |
Production Rate (BWPD) |
Ratio Increase |
Vertical |
1,064 |
- |
1,500' lateral |
3,673 |
3.5 |
3,000' lateral |
5,211 |
4.9 |
5,000' lateral |
6,858 |
6.4 |
Assumptions
10 md permeability
55’ net h
7,000’ TVD
2 ” tubing to 7,000’ TVD MD
4 ½” liner in lateral 7,000’ to TD
1,500 psig pressure differential
Drawdown across perforations
Additional engineering work will focus on the effect of large
diameter casing and related costs on a per barrel basis starting
with 7 ½” and consideration of techniques and scale currently
utilized in geothermal brine wells.
Lisbon Valley and Paradox Basin Geology
The Lisbon Valley Field has approximately 140 wells. According to
production statistics, as reported by the Utah Department of
Natural Resources, Oil, Gas and Mining Division, cumulative
lifetime production within the Lisbon Valley oilfield has totaled
51.4 million barrels of oil as of June 2017 (“Oil Production by
Field, Utah Department of Natural Resources, Division of Oil, Gas
and Mining”; June 2017; Click
Here). The Paradox Basin has been noted by the USGS as
having one of the largest undeveloped oil and gas fields in the
United States (“Assessment of Oil and Gas Resources in the Paradox
Basin Province…”; USGS; 2011; Click Here).
MGX is currently earning a 75% working interest in the Project,
with the remaining interest primarily controlled by a private Utah
corporation (the “Paradox Partner”). The Paradox Partner has been
engaged by MGX as subcontracted operator of the Project (see
press release dated March 23, 2017).
The Project is host to National Instrument (N.I) 51-101 estimated
prospective resources (the “Estimate”) consisting of leasehold and
royalty interests in San Juan County, Utah and Miguel County.
Colorado. The estimate was prepared by the Ryder Scott Company,
L.P. (“Ryder Scott”), an independent qualified reserves evaluator
within the meaning of N.I. 51-101 - Standards of Disclosure
for Oil and Gas Activities (“NI 51-101”), with an effective date of
June 30, 2017. The Estimate was prepared in accordance with N.I.
51-101 and the Canadian Oil and Gas Evaluation Handbook.
Estimated Gross Volumes
Unrisked Prospective (Recoverable) Hydrocarbon Resources
Leasehold Interest in San Juan County, Utah and San Miguel County,
Colorado of
MGX MINERALS INC.
As of June 30,2017
Formation |
ULTIMATE RECOVERY OIL –
MMBO |
ULTIMATE RECOVERY GAS –
BCF |
COC* |
LOW |
BEST |
HIGH |
LOW |
BEST |
HIGH |
|
Paradox Clastics |
CB2 |
41.799 |
59.498 |
85.324 |
33.441 |
47.602 |
68.266 |
0.075 |
CB3 |
41.915 |
60.641 |
85.833 |
33.536 |
48.517 |
68.671 |
0.075 |
CB4 |
12.766 |
18.745 |
26.692 |
10.213 |
14.781 |
21.355 |
0.075 |
CB5 |
33.185 |
48.065 |
68.841 |
26.548 |
38.453 |
55.074 |
0.075 |
CB6 |
6.603 |
9.607 |
13.874 |
5.283 |
7.686 |
11.100 |
0.045 |
CB7 |
1.892 |
2.735 |
3.948 |
1.514 |
2.188 |
3.158 |
0.032 |
CB8 |
19.108 |
27.525 |
39.079 |
15.287 |
22.022 |
31.264 |
0.068 |
CB9 |
11.452 |
16.671 |
23.711 |
9.162 |
13.337 |
18.970 |
0.068 |
CB10 |
14.565 |
21.169 |
30.088 |
11.652 |
16.936 |
24.073 |
0.068 |
CB11 |
2.021 |
2.929 |
4.244 |
1.617 |
2.344 |
3.396 |
0.032 |
CB12 |
9.352 |
13.609 |
19.525 |
7.482 |
10.887 |
15.620 |
0.045 |
CB13 |
9.333 |
13.158 |
19.297 |
7.468 |
10.815 |
15.438 |
0.045 |
CB14 |
3.195 |
4.621 |
6.634 |
2.556 |
3.697 |
5.308 |
0.045 |
CB15 |
6.455 |
9.432 |
13.633 |
5.164 |
7.546 |
10.908 |
0.045 |
CB16 |
2.752 |
3.987 |
5.768 |
2.202 |
3.190 |
4.615 |
0.045 |
CB17 |
3.770 |
5.390 |
7.835 |
3.016 |
4.313 |
6.269 |
0.040 |
CB18 |
4.673 |
6.728 |
9.572 |
3.739 |
5.383 |
7.658 |
0.045 |
CB19 |
16.690 |
24.226 |
34.542 |
13.358 |
19.381 |
27.636 |
0.068 |
CB20 |
2.931 |
4.253 |
6.118 |
2.435 |
3.402 |
4.895 |
0.040 |
CB21
(Cane Creek) |
35.336 |
51.338 |
73.971 |
28.272 |
41.073 |
59.177 |
0.097 |
CB22 |
5.635 |
8.261 |
11.957 |
4.508 |
6.609 |
9.566 |
0.045 |
Leadville |
1.000 |
2.100 |
4.000 |
153.000 |
231.700 |
341.600 |
0.066 |
*COC – Chance of
Commerciality = Chance of Discovery * Chance of
Development
Qualified Person
The technical portions of this press release were prepared and
reviewed by Andris Kikauka (P. Geo.), Vice President of Exploration
for MGX Minerals. Mr. Kikauka is a non-independent Qualified Person
within the meaning of National Instrument (N.I.) 43-101
Standards.
MGX may decide to advance its petrolithium projects into
production without first establishing mineral resources supported
by an independent technical report or completing a feasibility
study. A production decision without the benefit of a technical
report independently establishing mineral resources or reserves and
any feasibility study demonstrating economic and technical
viability creates increased uncertainty and heightens economic and
technical risks of failure. Historically, such projects have a much
higher risk of economic or technical failure.
About MGX Minerals
MGX Minerals is a diversified Canadian resource company with
interests in advanced material and energy assets throughout North
America. Learn more at www.mgxminerals.com.
Contact Information
Jared Lazerson
President and CEO
Telephone: 1.604.681.7735
Web: www.mgxminerals.com
Neither the Canadian Securities Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
Canadian Securities Exchange) accepts responsibility for the
adequacy or accuracy of this release.
Forward-Looking Statements
This press release contains forward-looking information or
forward-looking statements (collectively "forward-looking
information") within the meaning of applicable securities laws.
Forward-looking information is typically identified by words such
as: "believe", "expect", "anticipate", "intend", "estimate",
"potentially" and similar expressions, or are those, which, by
their nature, refer to future events. The Company cautions
investors that any forward-looking information provided by the
Company is not a guarantee of future results or performance, and
that actual results may differ materially from those in
forward-looking information as a result of various factors. The
reader is referred to the Company's public filings for a more
complete discussion of such risk factors and their potential
effects which may be accessed through the Company's profile on
SEDAR at www.sedar.com.
Analysis of a Long Cane
Creek Horizontal: New Insight into an Unconventional Tight Oil
Resource Play,
Paradox Basin,
Utah; Whiting Oil & Gas Corp; 2010
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