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Highlands set to team up with Schlumberger

Last updated: 15:33 25 Sep 2015 BST, First published: 07:33 25 Sep 2015 BST

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The technology could help revitalise an ailing onshore oil industry in the US.

Highlands Natural Resources (LON:HNR) said a unit oil field services firm Schlumberger has signed indicative terms to license a re-fracking technology that could become a “major disruptive force” in the industry.

Schlumberger wants to evaluate the potential of DT Ultravert (DTU) by assessing the data gained from five field trials over a year.

The technology has been developed by Diversion Technologies and specifically Paul Mendell, who created AIM-listed Iofina.

However, Highlands has effective control of the DTU as it owns a 75% stake in Diversion's current patent applications, both in the US and globally.

"Highlands will continue to work closely with Schlumberger and the engineers and geologists on our advisory board to perfect the DT Ultravert technology by designing fracks in several basins throughout the world,” said the company’s chairman Robert Price.

“Trials will be undertaken to demonstrate its effectiveness, which will provide us with valuable data regarding its application.

 "We believe that if successful, DT Ultravert could represent a major disruptive force in the market and generate significant future revenue for Highlands."

Against a backdrop of persistently low oil prices producers and the oil services companies that drill and frack have been frantically casting about for ways of optimising what they do. 

One approach deployed onshore in the US has been to re-frack wells, which, while lower cost than drilling new targets, has met with limited success.

A couple of firms have patented technology that plug old cracks. One is thought to use corn starch to make refracking more effective.

Still, the jury is out over the effectiveness of this new technology.

Diversion’s Mendell thinks he has come up with a simple and effective way to re-frack that is game-changing.

The technique uses a pressurised gas (initially it will be nitrogen), rather than fluids.

Mendell believes the gas will “block and divert” fracking fluid away from already cracked rocks to new, new untreated areas.

Crucially, he thinks it will work on horizontal wells that have thus far proved very difficult to re-frack.

 

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