Essay On Hydrocarbons

Valuation is the estimation of an asset’s value, whether real or financial, based on variables perceived to be related to future investment returns, on comparison with similar assets, or, when relevant, on estimates of immediate liquidation proceeds (Pinto, Henry, Robinson, Stowe; 2010). Correct valuation of real assets can present challenges to financial analysts. Different models can be used to arrive at the closest estimate of value and yet certain issues will always arise. This case attempts to tackle two approaches in real asset valuation: Discounted Cash Flow (DCF) analysis and the issues surrounding such, as well as the Black-Scholes Model for Real Options. Questions to be addressed in the study are:

issue. This pressure in the earth causes more crevices to be created for said chemicals to travel

The process of making synthetic crude oil requires an enormous amount of water, especially in the separation process. Each barrel of oil requires two tons of oil sands and up to five barrels of hot water. Water is also needed along with electricity to convert it steam. The steam is pushed by steam injections making bitumen less viscous. It is quite evident that oil sands are not practical in terms of its process. Also three-quarters of the bitumen can be recovered from the sands, leaving behind 25% as waste. With the technology in our present society, oil sands are not entirely practical in terms of efficiency; however, in the future, this may change. To reflect, there are many disadvantages associated with oil sands, especially in the way it is processed.

The process of the collection of an underground fluid would not be possible without the use of hydraulic fracturing. In the Shale reserves, located about 5,000 feet underground, suffer an extremely low permeability rate. Permeability is the measure of how well a fluid flows through an absorbent material at the depth, and within such nonporous rock, the ability of fluids to travel to the well is greatly limited. Fracturing increases the area of the fluid that is exposed to porous materials and thus greatly increases production. The method of fracturing utilizes a few key components which allow for an economical extraction of resources.

Canada’s oil sands are among the largest oil reserves in the word. This is evident from the fact that Canada is ranked third for the largest oil reserve in the world, after Venezuela and Saudi Arabia (“Oil Sands,” n.d.). “Oil sand”, is a naturally occurring mixture of sand, clay, water and bitumen (Gosselin et al., 2010). It is a very dense and extremely viscous oil that must be treated before it can be used to produce usable fuels such as gasoline and diesel (Gosselin et al., 2010). In North America, high oil prices, growing demand, and diminishing oil reserves results in greater interest to mine local oil reserves. Increased production of oil generates significant economic benefits but, at the same time, the development of the oil sands

Additional factors that can contribute to flooding include: storms, global warming, the capacity, amount, length and spread of rain over a particular area, the size of waterway to hold excess water, the catchment and climate conditions preceding rainfall, ground cover, topography and tidal impacts.

The Eagle Ford shale formation in south Texas has recently become the focus of many oil industry operators searching for new sources of hydrocarbons by using the latest technology in previously unexplored areas. This exploration enhances the development of even more advanced techniques as issues are identified and problems solved to address the unique properties of the formation and the surrounding surface environment. Even though a formation may be comprised of a single sedimentary layer from a similar geological time frame it is not a homogeneous block and has many features and anomalies that effect the pressure, permeability, type of hydrocarbons trapped and methods required to extract them. To understand these properties one must understand that shale is a fine-grained sedimentary rock that forms from the compaction of silt and clay placing it in the mudstone category of rocks [1]. Shale is different from other rocks in this category because it has a fissile structure and is laminated. The black shale in the Eagle Ford formation (Fig 1.) has a special property such that it contained organic material when it was deposited and during compaction over a millennium, the organic materials were converted into trapped oil and gas hydrocarbon deposits. This oil and gas are very difficult to remove because it is trapped within tiny pore spaces and or adsorbed onto clay mineral particles that makeup the shale.

The technique was highly widespread, and methods to increase the performance were developed and soon they found out that oil started to flow out from the rocks. Consequently, the employed

This spring, record breaking floodwaters along the Mississippi River caused massive damage in nine states, totaling over $25 billion dollars in damage (Watts, 2011). In most areas the floodwaters have receded, however there is concern that even a little rain could cause more flooding due to the already saturated land. As cities and towns are beginning the restoration process, one thing caused by the flooding waters cannot be restored. Pollutants’ such as nitrogen from fertilizer, due to this area being primarily composed of farming land, is making its way toward the Gulf of Mexico. Every year pollutants traveling in the Mississippi River enter the Gulf and contribute to the Coastal Dead Zone; however, this year the Dead Zone in the Gulf

Natural gas is one very important fossil fuel and from its various uses, its numbers have continued to dwindle. Supply and demand has taken a toll on this very precious commodity. Ordinary vertical drilling of natural gas has ceased to produce much and this once prevalent method may eventually end up becoming obsolete. In the 1990’s a different method that was being used, but wasn’t common, caught some attention and is called horizontal hydraulic fracturing or fracking for short. Since the method of fracking was first used in 1940, it has gradually changed and is now combined with a new strategy of drilling horizontally. This new way of drilling helps to reach vast amounts of previously inaccessible gases and oils that are stuck in shale. According to oil industries Devon energy, Chesapeake, and Halliburton’s estimates, around 827 million cubic feet of untapped gases and oils are under the U. S. but may not be as easily accessible as once thought (Mooney 80-85).

Valuation is the estimation of an asset’s value, whether real or financial, based on variables perceived to be related to future investment returns, on comparison with similar assets, or, when relevant, on estimates of immediate liquidation proceeds (Pinto, Henry, Robinson, Stowe; 2010).

great amounts of hydrocarbons from each well. If we use this process, this will mean that

crude oil allowed in at the bottom of the tower at a time so that the

The oil and gas industries involve a high amount of documentation for both transportation as well as extraction and field services. Activities are highly regulated, and subject to oversight from Federal Energy Regulatory Commission (FERC), the Department of Transportation (DoT), the Environmental Protection Agency (EPA), and the Department of the Interior (DoI). That said, the process of regulation is trending toward a more digitized system, with organizations like FERC having their own submission portals that implement a “fill-in-the-blank” platform to complete forms. However, not all forms have yet been converted to digital submission even in agencies with online portals, and other agencies still remain reliant on

Use SCBEU units at bitumen and oil sand sites to ‘extract and upgrade’ at the site. The SCBEU unit would replace much of the current oil sand solvent extraction washing process and does not require solvent recovery or disposal (4,5,9,10,11,12,25,28). [This case will be developed in this proposal using the Arroyo Grande Bitumen site near Edna, CA. (26,27,28)]