Oil Recovery Startup Gets Going With $700M Blackstone Investment
Oct 8 (Reuters) - Windy Cove Energy LLC said it received a $700 million equity investment from Blackstone Group LP, funds the company will use to buy mature oilfields that it will flood with carbon dioxide to free trapped oil and gas.
Even as U.S. oil and gas companies increasingly focus on vast shale fields, the high cost of developing new reserves is prompting many to use enhanced oil recovery methods that help extract more crude from existing wells.
U.S. companies such as Denbury Resources Inc, Whiting Petroleum Corp and privately held Roosevelt Resources LP inject carbon dioxide (CO2) into wells to boost output.
Windy Cove Energy, which is just about four months old, is looking to buy oilfields or partner with existing owners, Chief Executive Chuck Fox told Reuters.
"A reasonable-sized CO2 flood costs about $200 million and so we have the money right now for about three or four of these," he said.
More than 20 billion barrels of oil are estimated to be recoverable from CO2 flooding in the United States, Fox said.
The company is targeting projects in the Rocky Mountains, Texas's Permian Basin, the U.S. Mid continent and the Gulf region.
Enhanced oil recovery technologies may add between 1.5 million and 3 million barrels per day (bpd) to U.S. oil production by 2030, analysts at consultant Wood Mackenzie said last month.
(Reporting by Swetha Gopinath in Bangalore; Editing by Saumyadeb Chakrabarty)
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