Houston, TX, May 13, 2020 --(PR.com
)-- As operators scramble to cut costs, the Texas Railroad Commission (RRC)—which oversees all oil & gas operations in the state, including the top U.S. oil producing Permian Basin, voted to approve a new 10-year H13 tax credit for use of a green EOR technology. Known as the AssurEOR program and developed by Houston-based oil innovation start-up Locus Bio-Energy Solutions, the biosurfactant treatments are the first cost-effective and environmentally friendly products proven to sustainably increase oil production by 40% or more and extend the lifespan of declining wells—boosting revenue and financial stability.
What it is
The H13 tax credit qualifies leases for a 50% Severance tax credit under Statewide Rule 50 (Texas Administrative Code Rule 3.50). It is applicable to all production on that lease, not just incremental oil, for 10 years, as long as AssurEOR treatments are continued and an increase in production is maintained.
“This rarely granted approval by the RRC provides technical validation that AssurEOR is a proven Enhanced Oil Recovery (EOR) technology that operators can use to consistently enhance production, prolong the economic lives of their wells and minimize new drilling,” said Jonathan Rogers, CEO of Locus Bio-Energy. “It’s a much-needed financial win for the industry and a win for the environment.”
Why it Matters
The tax credit provides oil and gas companies with a new avenue for substantial savings, and an option to do so without sacrificing sustainability. For larger producers, the H13 approval will result in significant dollars per year of additional revenue from both increased production and tax credits, especially when oil prices start to improve.
“The H13 tax credit and production increases demonstrate the tremendous cost-saving value of using a green technology, something not previously possible, and come at a time where operators are looking to minimize expenses and maximize ROI in any way possible,” Rogers said.
A Texas operator with leases producing an average of 10,000 barrels of oil a day, at today’s price of $23/barrel, could save almost $2 million in taxes—not including additional revenue from production increases and lowered operating costs. A larger operator with leases producing 100,000 barrels of oil daily would receive over $19 million annually in tax savings.
“Unlike other EOR programs, the AssurEOR treatments require little to no CAPEX, meaning that even smaller operators can reap the financial gain from its production and tax benefits.”
Named 2019 New Technology Development of the Year in the Oil & Gas Awards, the AssurEOR treatment program has demonstrated impressive performance on over 300 wells to date across the Permian, Appalachian and other top oil basins. For more information on the customized treatments, visit LocusBioEnergy.com.
About Locus Bio-Energy Solutions™
Locus Bio-Energy Solutions™ offers patent-pending, award-winning biosurfactant treatment programs for oil applications that are cost-competitive, biodegradable and safer than current chemical and traditional treatments, with even better results. A world-class team of R&D scientists have solved many of the problems plaguing other biological-based products with the development of the AssurEOR program. The biosurfactant treatments are optimized for specific well conditions for enhanced oil recovery, wellbore cleaning, and paraffin wax and asphaltene remediation, including the cleaning of rods, pipelines and flow lines, casings and solidified storage tank bottoms. For more information, visit LocusBioEnergy.com.