LONDON, February 5, 2015 /PRNewswire/ --
As Canadian oil sands companies struggle with high production
costs and low prices, and North American shale producers are forced
to rethink strategy, a Utah-based
high-tech oil sands play announces game-changing $28 production costs.
Toronto-based MCW Energy Group
(MCWEF: OTCQB; TSV: MCW.V) has announced that its Utah production costs per barrel have been
slashed to $28 as a result of lower
costs of petroleum products used for extraction, while plans to
purchase the Temple Mountain oil sands lease would reduce feedstock
costs by up to $5 per barrel,
bringing total costs down to $23-$24
per barrel.
These prices are nearly impossible find at a time when both oil
sands and shale producers are taking a nosedive in this market.
Indeed, experts estimate that MCW's per barrel oil production in
Utah is more profitable than 95%
of shale oil currently being produced, and more profitable than any
other oil sands project in North
America.
Canadian oil sands heavy crude production costs are around
$40-$60 per barrel-vastly more
expensive than MCW's $28/barrel oil
sands production projections at its newly built processing plant in
northeastern Utah - a state that
is home to some 32 million barrels of heavy crude buried in
sand and silt.
Canadian oil sands companies went on a $155 billion spending spree over the last decade,
according to the New York Times, and now are saddled with extremely
high productions costs - costs that will have a hard time surviving
current low oil prices.
Suncor (NYSE:SU), the largest oil sands operator in Canada, is getting rid of 1,000 contract jobs,
says NYT, while Shell Canada - a subsidiary of Royal Dutch Shell (LON:RDSB) and one of
Canada's largest integrated oil
companies--is slashing its oil sands workforce by 10%.
Exxon-controlled (NYSE:XOM) Imperial Oil (NYSE:IMO) - another
Alberta oil sands player - just
announced a fourth-quarter earnings drop of 36%.
MCW's new oil sands extraction pilot plant at Asphalt Ridge -
the heart of Utah's oil sands bonanza - opened on 1 October 2014 - and will have 5,000 bpd coming
online in 2016/2017.
At $28/barrel production costs,
and likely further cost reductions, this is one of the most
profitable oil plays in North
America, and certainly the most profitable oil sands play in
the current environment.
By James Burgess of
Oilprice.com
SOURCE Oilprice.com