(TheNewswire)
VANCOUVER, BRITISH COLUMBIA / TheNewswire / December 15, 2017 - MGX Minerals Inc. (“MGX” or the “Company”) (CSE: XMG / OTCQB: MGXMF / FKT: 1MG) is pleased to report that the initial ground survey is nearing completion in preparation for a detailed 3D seismic survey of its Utah Petrolithium project (the “Project”). The survey of the Project includes approximately 9,000 source points. This model will outline subsurface geological formations and structures favorable for accumulations of oil and gas as well as lithium brine bearing formations.
The Project is located next to the Lisbon Valley oilfield located within the Paradox Basin, Utah which has shown historical brine content as high as 730 ppm lithium (Superior Oil 88-21P) and past production of oil exceeding 50 million barrels. The Company’s cumulative Project land position comprises over 110,000 acres of oil and gas leases and 118,000 acres of largely overlying mineral claims, including 80,380 acres of unitized Federal, State and Private lands within the Blueberry Unit (“Blueberry”) where MGX controls the overwhelming majority of mineral claims. This represents the first large scale integrated petroleum and lithium project ever developed in the United States.
NFLi-5 Rapid Lithium Extraction
System
MGX and engineering partner PurLucid Treatment Systems (“PurLucid”) are nearing
completion of the first commercial scale rapid lithium extraction
plant and are currently in flow and pressure testing. MGX expects
delivery and deployment in January 2018 (see press release dated December 6,
2017). This system is capable of processing up to 750
barrels per day (120 cubic meters) and serves as the commercial
platform for the first 7500 barrels per day (1200 cubic meters) now in
fabrication. This technology has been extensively tested in pilot
plant phase since July 2017 on all types of lithium bearing brine
throughout the Company’s extensive project portfolio including high
hydrocarbon evaporator blowdown (EBD) wastewater from SAGD oilsands
production, traditional oil and gas wastewater, traditional lithium
brine, and high magnesium wastewater concentrate from mine tailings
among other sources throughout North America. As MGX’s Paradox Petrolithium project advances, systems will be
deployed for hydrocarbon separation and mineral extraction. The
Project relies heavily on MGX-PurLucid patented and patent-pending
water handling and rapid lithium extraction technology capable of
processing complex brines in conjunction with oil and gas development
that produces a clean water by-product aimed at mitigating water
handling and disposal cost and providing an innovative clean water
solution to the oil and gas industry. It has been suggested that
Paradox Basin unconventional oil and gas development has been hindered
by high total dissolved solids and water handling challenges and
costs. (Note)
(Note) Analysis of a Long Cane Creek Horizontal: New Insight into an Unconventional Tight Oil Resource Play,
Paradox Basin, Utah; Whiting Oil & Gas Corp; 2010
Integrated
Petrolithium Engineering
Initial engineering studies have been completed by SigmaCubed
of Denver, Colorado modelling of simultaneous (brine / oil and gas)
production scenarios aimed at drawing brine and oil from a single
well. Reservoir simulations were run for the different scenarios to
determine the sensitivity of the results to the input assumptions. There are three main variables – lateral horizontal
length (feet), net reservoir height (feet) and permeability
(millidarcies). A base case was run for a vertical well. Production
rates (BWPD) were then calculated for different combinations of these
three variables. For the purposes of this study, a 1,500-psi pressure
differential drawdown at the perforation interval was assumed. A
pressure drawdown across perforations can be achieved by various
different production methods (i.e. rod pump, gas lift, hydraulic pump,
jet pump, etc.). The study found that it did not matter how the
pressure differential is achieved, reservoir conditions will
ultimately determine production volumes. Also, for the purposes of
this study, the tubing size was limited to one case (2 7/8” O.D.)
primarily because the 2 7/8” tubing x 5 1/2” production casing
configuration is one of the most common wellbore configurations
utilized by the petroleum industry. Upon reviewing the results of this
study, it become increasingly apparent of the multitude of variable
combinations resulting from the study of just one tubing size. The
results of this study can be ratioed up or down to obtain relative
production volumes for 2 3/8” or 3 1/2” tubing strings.
Produced water density, oil API gravity and water oil ratios were found to have negligible effects on total production volumes. The biggest effect these variables had would be in the fluctuation of the producing fluid level in the wellbore. For the purposes of this study, a full column of 100% petroleum brine water weighing 11.0 ppg was assumed.
-------------------------------------------------------- |Type of Wellbore|Production Rate (BWPD)|Ratio Increase| |------------------------------------------------------| |Vertical |1,064 |- | |------------------------------------------------------| |1,500' lateral |3,673 |3.5 | |------------------------------------------------------| |3,000' lateral |5,211 |4.9 | |------------------------------------------------------| |5,000' lateral |6,858 |6.4 | --------------------------------------------------------
10 md
permeability
55’ net h
7,000’ TVD
2 ⅞” tubing to 7,000’ TVD MD
4 ½” liner in lateral 7,000’ to TD
1,500 psig pressure differential
Drawdown across perforations
Additional engineering work will focus on the effect of large diameter casing and related costs on a per barrel basis starting with 7 ½” and consideration of techniques and scale currently utilized in geothermal brine wells.
Lisbon Valley and
Paradox Basin Geology
The Lisbon Valley Field has approximately 140
wells. According to production statistics, as reported by the
Utah Department of Natural Resources, Oil, Gas and Mining Division,
cumulative lifetime production within the Lisbon Valley oilfield has
totaled 51.4 million barrels of oil as of June 2017 (“Oil Production
by Field, Utah Department of Natural Resources, Division of Oil, Gas
and Mining”; June 2017; Click Here). The Paradox Basin has
been noted by the USGS as having one of the largest undeveloped oil
and gas fields in the United States (“Assessment of Oil and Gas
Resources in the Paradox Basin Province…”; USGS; 2011; Click Here). MGX is currently
earning a 75% working interest in the Project, with the remaining
interest primarily controlled by a private Utah corporation (the
“Paradox Partner”). The Paradox Partner has been engaged by MGX as
subcontracted operator of the Project (see press release dated March 23,
2017).
The Project is host to National Instrument (N.I) 51-101 estimated prospective resources (the “Estimate”) consisting of leasehold and royalty interests in San Juan County, Utah and Miguel County. Colorado. The estimate was prepared by the Ryder Scott Company, L.P. (“Ryder Scott”), an independent qualified reserves evaluator within the meaning of N.I. 51-101 - Standards of Disclosure for Oil and Gas Activities (“NI 51-101”), with an effective date of June 30, 2017. The Estimate was prepared in accordance with N.I. 51-101 and the Canadian Oil and Gas Evaluation Handbook.
Estimated Gross Volumes
Unrisked Prospective (Recoverable) Hydrocarbon Resources
Leasehold Interest in San Juan County, Utah and San Miguel County,
Colorado of
MGX MINERALS INC.
As of June 30,2017
*COC – Chance of Commerciality = Chance of Discovery * Chance of Development
The technical portions of this press release were prepared and reviewed by Andris Kikauka (P. Geo.), Vice President of Exploration for MGX Minerals. Mr. Kikauka is a non-independent Qualified Person within the meaning of National Instrument (N.I.) 43-101 Standards.
MGX may decide to advance its petrolithium projects into production without first establishing mineral resources supported by an independent technical report or completing a feasibility study. A production decision without the benefit of a technical report independently establishing mineral resources or reserves and any feasibility study demonstrating economic and technical viability creates increased uncertainty and heightens economic and technical risks of failure. Historically, such projects have a much higher risk of economic or technical failure.
MGX Minerals is a diversified Canadian resource company with interests in advanced material and energy assets throughout North America. Learn more at www.mgxminerals.com.
Jared Lazerson
President and CEO
Telephone: 1.604.681.7735
Web: www.mgxminerals.com
Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.
This press release contains forward-looking information or forward-looking statements (collectively "forward-looking information") within the meaning of applicable securities laws. Forward-looking information is typically identified by words such as: "believe", "expect", "anticipate", "intend", "estimate", "potentially" and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking information provided by the Company is not a guarantee of future results or performance, and that actual results may differ materially from those in forward-looking information as a result of various factors. The reader is referred to the Company's public filings for a more complete discussion of such risk factors and their potential effects which may be accessed through the Company's profile on SEDAR at www.sedar.com.
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