Grieve EOR Project Update Agreement to Acquire Crude Export Pipeline
HIGHLIGHTS
- Agreement signed for acquisition of the West Casper Pipeline
- Means of exporting crude oil from Grieve Project to be secured
- The acquisition will also include additional crude storage tanks
GRIEVE EOR UPDATE
Elk Petroleum Ltd (ASX Code: ELK) is pleased to advise that it has signed an Asset Purchase Agreement with Unocal Pipeline Company to acquire an 8” crude oil pipeline to transport oil production from Elk’s Grieve oil field. The transactions contemplated by the Asset Purchase Agreement will close upon receipt of certain approvals and payment of the purchase price. Closing is anticipated to occur within the next few months. This acquisition is another important step in the development of ELK’s planned CO2 flood project to increase oil recovery from the Grieve oil field.
The pipeline runs from the Grieve field to a storage and distribution hub at the Platt Station near Casper, Wyoming. The purchased assets include the 32.4 miles long pipeline and associated branch lines from other fields as well as additional storage tanks and other facilities.
The pipeline was purchased from Unocal Pipeline Company (now part of Chevron Corporation). It has been “moth balled” since 2002 when crude oil was removed from the line by pigging operations and the pipeline was then purged with nitrogen. It has been cathodically protected against corrosion at all times but will require inspection and some repairs prior to returning the pipeline to service for transporting crude from the Grieve EOR project. The elevation of the Grieve field is approximately 500 metres above the storage tanks at the Platte Station; this elevation difference means that Grieve crude oil transportation will not require pumping even at the maximum production rates, which are expected from the Grieve EOR project.
Managing Director Bob Cook said, “This acquisition will mark the achievement of another important milestone towards establishing the Grieve EOR Project.”
The pipeline location and route is depicted as the West Casper Pipeline as shown in red in the map contained in the ASX announcement.
Concurrent with this positive development, the sourcing of debt and/or equity funds or a joint venture for the project is progressing.
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