Cano to Conduct ASP Analysis of Nowata Field

Cano Petroleum

Cano Petroleum has engaged Surtek, Inc. of Golden, Colorado to evaluate its Nowata Field reservoir and determine whether the Alkaline-Surfactant-Polymer (ASP) process can be utilized as the lead technology to maximize oil recovery. Surtek is a petroleum engineering firm that specializes in enhanced oil recovery technologies and is a principal developer of the field-proven ASP process.

"We have been helping companies such as Cano successfully improve their oil recovery efficiency and profitability for over 25 years," said Harry Surkalo, President and owner of Surtek. "At Cano's Nowata Field, Surtek could increase oil recovery to between 20% and 30% of the original oil in place if our tests determine that the ASP technology is applicable. We are encouraged by the fact that Nowata has already undergone successful waterflooding, as this is generally a positive indication that our ASP process can be a viable enhanced recovery method."

Cano currently produces approximately 230 net barrels of oil per day from its Nowata wells. The successful application of ASP technology in this field is expected to significantly increase the amount of oil recovered and the rate at which it is produced.

"We are pleased to have advanced our Nowata property to the ASP evaluation stage. This is an important step in the development of the property and will enable us to increase production and, at the same time, reduce operating costs per barrel of oil," said Jeff Johnson, Chairman and CEO of Cano Petroleum. "We look forward to the results of the lab study and to proving the inherent value of our Nowata property."

Cano's Nowata wells produce from the Bartlesville Sandstone on 4,500 acres of leasehold land. Proved producing reserves are estimated at 995,753 barrels as of June 30, 2004.

The ASP Process

Surtek will develop an optimum ASP fluid mixture by conducting fluid-rock compatibility tests at reservoir temperatures and perform radial corefloods for final system selection. The ASP evaluation and design project results will be available in 2005.

The project begins with the drilling of a well at Nowata, from which Cano will obtain core samples. This rock will be utilized by Surtek throughout the three-phase ASP project. Once the core sample is available, chemicals are screened to work with the reservoir fluids. During the next phase, crushed formation rock is mixed with the oil and the chemicals that have passed initial screening. Formulations that pass the fluid and crushed rock tests are taken to the core flood stage. Once waterflooded, the core sample is flooded with the sequence of chemicals identified during earlier testing as being the most likely to succeed. Results are measured and any successful formulations are evaluated for profitability in the field.


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