‘Reserve’ status increases value of Enefit’s oil shale holdings
Enefit American Oil has secured what is believed to be the world’s first confirmed oil-shale-to-shale-oil Reserve classification, a third-party analysis confirming the Utah Project’s technical and economic feasibility, according to rigorous mining and petroleum industry reporting standards.
This is a major milestone that adds significant value to the Project. In addition to showing that the Project is technically and financially viable, it confirms there are nearly 520 million proven and probable barrels of shale oil on about 6,000 acres of our privately owned Enefit South property. That will support a production level of approximately 50,000 barrels of oil a day for more than 30 years.
“The Reserve finding – made by Millcreek Mining Group after more than six months of study – is a critical step along the development path for natural resources projects,” said Enefit’s Acting CEO Ryan Clerico. “It moves the Project up the value curve by converting from the less-certain designation of ‘Resource’ to a Reserve. It also shows financial institutions and potential investors that the Project has solid long-term value.”
Seeking outside investors has always been part of Enefit’s long-term strategy for the Utah Project, which will require several billion dollars to build. With a Reserve classification in hand, the company can begin that process; Enefit has successfully attracted investors for its oil shale project in the Middle Eastern country of Jordan and is looking forward to the opportunity of doing so in the U.S.
The Reserve statement demonstrates that the Utah Project’s business plan is sound and that using the commercially proven Enefit technology is feasible. The oil production technology has been used for more than 30 years at Enefit’s operations in its home country of Estonia; the Reserve finding shows, through test work and engineering, that it is compatible with Utah oil shale. While there are certainly differences between the Estonian and Utah shale – for instance, the Utah shale is much drier – the fundamental process can be adapted for the Project.
In total, Enefit’s holdings contain more than 3.5 billion barrels of in-place shale oil across 27,000 acres, nearly two-thirds of which is private land. The Project is in what’s considered a “sweet spot” in the Green River Formation, the world’s largest deposit of oil shale, centered at the junction of Utah, Wyoming and Colorado.