Economic models verify heavy oil profitability

G. Warfield Hobbs IV, Robert O. WinklerAmmonite Resources Co. New Canaan, Conn. These two steam injection wells and producing well are in California's Midway-Sunset field, which produces about 166,000 b/d of heavy (11-14° API) oil. Economic models show how investments in California heavy oil have improved with new technologies that have reduced costs and improved recovery. Major oil companies, as well as small independents, are now aggressively developing heavy-oil projects. Until recently, the conventional perception of heavy oil (20° API gravity and lower) was that heavy oil production is uneconomic unless oil prices are in the $30/bbl range. But heavy oi...

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