From: Marketwatch
SANDY, UT, Apr 18, 2012 (MARKETWIRE via COMTEX) — Utah-based Red Leaf Resources, Inc. (‘Red Leaf’) has announced the March 28, 2012 closing of a joint venture for oil shale development in Utah with Total E&P USA Oil Shale, LLC (‘Total’), a US affiliate of Total SA, the 5th largest international integrated oil and gas company.
Under the terms of the agreement, Red Leaf and Total will jointly launch an Early Production System (EPS) to prove the commercial scalability of Red Leaf’s EcoShale(TM) In-Capsule Process on oil shale leaseholds located in the Uintah Basin of Utah. This ‘ex-situ’ technology is applicable to shallow oil shale formations which will first be mined, then placed into large sealed capsules before undergoing a slow pyrolysis reaction to yield high quality hydrocarbons. The EcoShale(TM) process has a significantly reduced environmental footprint compared to operations for any other existing ‘ex-situ’ oil shale production technologies. Total will fund an 80 percent share of the EPS expenses, which are estimated at approximately $200 million in the aggregate.
Commercial demonstration of the EcoShale(TM) technology is intended to prove the economic and environmental attributes of the process. Thereafter, Red Leaf and Total intend to launch an advanced commercial scale project on approximately 11,000 acres of jointly owned oil shale leaseholds that are estimated to contain several hundred million barrels of recoverable hydrocarbons. Total will also fund an 80 percent share of the first $200 million of the commercial production phase of operations. As part of this agreement, Total has the right to license the EcoShale(TM) technology for use on other future oil shale projects worldwide and has become a shareholder in Red Leaf Resources, Inc.
“This joint venture with Red Leaf furthers our commitment to developing unconventional resources,” explained John Bannerman, CEO of Total E&P USA Oil Shale, LLC. “Given the magnitude of Oil Shale resources, in particular in the US, we believe that this project has an important long term potential for global energy markets. Red Leaf has a strong technical and scientific team generating interesting original ideas. We look forward to working with them to develop leading edge sustainable and environmentally responsible oil shale extraction processes.”
Referencing the joint venture, Utah Governor Gary R. Herbert stated, “As Utah is focused on our long-range, strategic plan to keep energy prices low and supplies stable, I’m pleased to see more investment and energy development happening. We’re committed to ensuring that Utah remains a leader in energy production and exports.”
In connection with the closing of the Total joint venture, Red Leaf also closed on a private placement of common stock for just over $100 million in proceeds.
“From our very beginning, Red Leaf set out to solve the environmental, produced oil quality and economic challenges surrounding oil shale development,” explained Red Leaf CEO Jim Patten. “The EcoShale(TM) process resolves critical issues, including emissions, use of water, the amount of energy required to emancipate oil from the rock and surface remediation and reclamation. The Red Leaf technology also produces a high quality oil at a very economical cost. We believe that Total’s due diligence in reaching this joint venture validates the science and technology behind the Red Leaf EcoShale(TM) process.”
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