The BDM technology is described in one of those stock letters that come in the mail by the dozens every day, and which I usually throw away - but this one caught my eye.
Apparently, ExxonMobil is a purchaser of this 10-month-old technology, and if ERHC Energy's partners, Addax or Pioneer Natural Resources, also obtain it, the technology could allow companies to tap reservoirs that lie partly beneath the shared boundary lines of Chevron/ExxonMobil's Block 1 and ERHC Energy's Block 2 and Block 4. The two ERHC Energy properties are immediately east and south of Block 1, respectively.
Seismic done for Chevron and Exxon in Block 1 may have already identified such boundary-straddling reserves, raising the ante and the stakes for the company that gets there first. Chevron plans to sink its first well this month, the company reported in early December.
Here is an article from UpstreamOnline that provides some objective background from 1996, followed by the letter we received today:
US research facility opened to private investors
By Upstream staff
THE US Department of Energy is in the final stages of privatising the government's principal oil research laboratory, which is projected to be self-sufficient within two years.
The department has reached an agreement with its petroleum programme management contractor BDM-Oklahoma to commercialise the National Institute for Petroleum and Energy Research (NIPER), which has been in state hands since 1918.
The move, part of the DoE's so-called strategic alignment initiative, is expected to save US taxpayers at least $25 million over the next five years.
BDM will continue to carry out oil research projects for the next two years under its current contract with the state while attracting additional research and other projects from government agencies and the private sector.
By November 1998, when the department's contract with BDM expires, the new private research facility should be self-sustaining and encouraged to compete for future state funding in addition to private company projects.
Under the privatisation plan, BDM has shifted most of NIPER's research staff from the former federal laboratories in Bartlesville, Oklahoma, to leased space at Phillips Petroleum's R&D facility in the same city.
BDM has agreed to streamline the workforce at the Bartlesville laboratory. BDM president Lowell Smith projects the company will soon be actively hiring or re-hiring technical staff with very specific experience and expertise to fulfil current contracts and in anticipation of future projects.
In addition, BDM Petroleum Technologies is in the process of establishing a presence in Houston and other key oil industry centres, and is actively interviewing potential candidates to solicit commercial business within the energy industry.
DoE plans to sell all or part of the federal property previously occupied by NIPER and DoE's Bartlesville Project Office and will also consider requests from academic or other institutions to take over ownership of some or all of the facility.
Here is the letter we received today, which is trying to sell shares of a company - which we believe we have named above after researching the technology a little bit, on the Internet - that make the BDM drilling technology:
The Next Generation of Mega Wealth
BDM stands for Bi-Directional Module. Here's how the BDM System could change the oil industry... and generate a ton of new revenues for "The Company."
Using conventional vertical drilling equipment, producers can only access about 20-35% of the oil in any given reservoir. Imagine a typical underground oil reservoir shaped like a Christmas tree. Conventional vertical wells can only get to the oil in the tree's "trunk" because they can only drill straight down.
The oil in the side branches represents the 65-80% of oil that gets written off as "stranded resources." (See figure 1.) However, BDM-equipped drills can not only plum the entire length of the tree's "trunk" - they can turn on a dime, even thousands of feet below the surface, and tap into every side "branch" on the way down! (See figure 2.)
As Shawn Robins of the Canadian Ministry of Energy and Mines puts it: "Resource recovery is optimized by entering the reservoir rock either laterally or at an angle, maximizing the surface area of the reservoir in contact with the borehole."
But what does the technology mean in real dollar terms? Right now, U.S. production is hovering around 1.9 billion barrels a year - roughly 1.5 billion below the historic high set in 1970. Ideally, BDM would help to boost it from 1.9 billion barrels to about 5.7 billion barrels - a difference worth some $223 billion dollars in today's market.
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Project Name:
BDM System
ID #: DE-FX2X-05NT15XX8
Developers:
"The Company" with research assistance from the U.S. Dept. of Energy and the National Energy Technology Laboratory.
Description:
Integrated, computer-controlled technology allowing oil producers to drill and extract oil more efficiently.
Purpose:
Help increase world oil production by 65%.
Completion Date:
Internal go-ahead given by "The Company" management Aug. 2005 to proceed toward product launch... Production phase is imminent, with project funding cleared through Sept. 31, 2006.
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No wonder the U.S. government is backing "The Company's" project (also known as DOE Project #DE-FX2X-05NT15XX8) through the Department of Energy and the National Energy Technology Laboratory. Now let's look at the specifics of how the technology works...
Recovering Billions In "Unclaimed Profits"
"The Company's" BDM System is made up of three main pieces. They all work together as an integrated system for finding oil underground more effectively:
1) A customized computer network that controls everything and provides continuous 3-D imaging of the entire well site
2) A proprietary oil drill bit that can cut through tough underground formations including rock and shale like a hot knife through butter (sound familiar?)
3) An advanced drill shaft and the housing that surrounds the shaft, which can turn the drill in any direction the operator chooses
I know that sounds complicated. But it comes down to this. The BDM System will allow oil drillers to steer their drills with greater precision so they can find and extract more crude oil.
Sitting comfortably thousands of feet above the drill hole, engineers working for major producers like ExxonMobil, Shell and BP/Amoco can sip their coffee while surrounded by wall-sized television monitors.
I haven't been in one of these control rooms, but the pictures I've seen look like the NASA flight control center in Houston, with its giant monitors surrounding the open room and white-shirted engineers manning the work stations...
Except in this case, the monitors glow with images beamed back to the well site from the drill head as it burrows through the earth and turns into each pocket of the reservoir.
The monitors also provide continuously updated 3-D imaging of the entire reservoir.
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"These techniques are so accurate that they can target an area the size of a walk-in closet located more than 5 miles from the well and a mile or more below the surface."
(American Petroleum Institute)
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"These techniques are so accurate that they can target an area the size of a walk-in closet located more than 5 miles from the well and a mile or more below the surface," reports the American Petroleum Institute.
Imagine a drill - armed with "The Company's" next-generation Hughes bit - snaking straight down a mile into the earth, then abruptly turning at a 90-degree angle and continuing on for 5 miles in a new direction to tap into a rich reserve of oil.
The industry term for this kind of innovation is "directional drilling" or "horizontal drilling."
BDM Could Solve the Oil Technology Shortage"Many venture capitalists are betting their investment money on new technology focusing on reservoir production, especially technologies that help recover part of the 65 percent of hydrocarbons that are currently unexploited."
~ Elliot Bouillion, Murphree Venture Partners, Boulder, CO
"To be sure, the financial community is betting on technology..."
~ Oil & Gas Financial Journal
"Technology innovation will be the key to overcoming the constraints of an increasingly challenging resource base, domestically and around the world" ~ U.S. Dept. of Energy
"Today's increasing competition, rising costs, and looming oil crisis may just be the needed drivers to accelerate technology adoptions."
~ Petroleum Analyst Chris Bakewell
"The new BDM for the 2 3/8-inch steerable CTD BHA will considerably reduce the capital expenditure needed to drill a "smart" yet relatively shallow land well."
~ Daniel Ferguson, National Energy Technology Laboratory
And BDM represents the absolute cutting edge when it comes to such unconventional drilling techniques - just as "The Company's" old rock bit represented back in Hughes' time...
The R&D phase of the BDM System's development began almost 10 months ago... But the product's launch phase just received the "thumbs up" from the company's management in August 2005.
After a recent phone conversation with a source working deep inside this project, I'm confident the BDM System could be coming into production sometime between now and the end of January.
We believe investors who get in early could be looking at a quadruple-digit windfall of 1,813% or more after the BDM technology "goes public."
Why the U.S. Govt. Is Backing This Project
As any oilfield geologist can tell you, there is no "shortage" of crude oil, per se. The real problem is the lack of efficiency in the current technologies used to extract the oil from the ground.
Geologists at the American Petroleum Institute and the prestigious Oil & Gas Journal, for example, estimate that a full 65% of the oil present in each reserve is never recovered.
That bears repeating...
A full 65% of the world's proven oil reserves are never recovered due to drilling inefficiencies.
Oilfield Geologist Dan Ferguson says the amount of oil left in the ground at each well site is even higher. Which is why he feels BDM is so important right now, and so potentially lucrative.
Holding a Geology Degree from the University of Texas, Dan has run his own oil company, directed teams of wildcatters, and even consulted for the legendary T. Boone Pickens as a field geologist for Mesa Petroleum.
Now Dan is helping to develop BDM with "The Company" as an attaché with the National Energy Technology Laboratory. As Dan told me just a few days ago: "Actually, in most fields in the U.S., the percentage of what we refer to as 'original oil in place' (the oil that gets left in the ground) is in some cases 80% or more, and sometimes it's even greater than that."
The reason is simple: Traditional vertical wells can only drill down... BDM lets them drill down AND to the side.
Investors who get in today could be looking at a quadruple-digit windfall of 1,813% or more - and almost certain double-digit gains - once the BDM technology "goes public" shortly after production begins.
And while no serious investor pretends to know the future - I am quite confident that there is no better investment on the planet right now. But only if you act on this information before it hits the mainstream.
>> Generating $6 Billion a Year Already
Part of the reason we're so confident in "The Company's" ability to launch its new BDM technology quickly is its track record for bringing similar technologies to market. Let's take a look at a few recent examples...
Not too long ago, "The Company" stepped in to help a producer in Ecuador to connect two separate deposits of crude oil thousands of feet underground, and tap them with a single well. It increased the site's production by 3,500 barrels a day - an increase to the company's bottom line of $1.59 million per week.
Marathon Oil Corporation is a $22 billion company with operations on four continents. In the past year, shares of this $22 billion behemoth have soared 105%, thanks in large part to a modified version of the drill bit designed by Hughes Senior.
One of the North Sea's most prominent oil producers is Norsk Hydro ASA (NYSE: NHY), a $25 billion Norwegian giant whose shares have risen 68% over the last year - again thanks in part to ASA's reliance on "The Company's" technology. In one case "The Company" added $12.5 million to Hydro's bottom line. Plus, NHY completed the project 35.5 days ahead of schedule in the harsh North Sea.
So yes, BDM promises to do a lot for "The Company's" bottom line when it comes to market. But it's good to know the world's major oil producers - including ExxonMobil, Shell, BHP Petroleum, and China National Petroleum Corporation - already spend more than $6 billion a year on "The Company's" technologies.
They feel "The Company" is worth the money, and they're happy to continue paying billions.
That in turn provides investors with an extra measure of security. Just one more reason why I invite you to join me in this very special opportunity right away...
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