Kern River Holdings, Inc.

KRH’s oil and gas leases are on the southwest edge of the giant Kern River Oil Field. The field originally contained approximately 3.6 billion barrels of a 13 API gravity heavy oil crude, and has produced 2.6 billion barrels. The heavy oil can only be produced in economic quantities through the injection of steam, which heats up the oil, reducing its viscosity and allowing it to flow to the producing wells. The six KRH leases have produced over 4.5 million barrels and are currently producing more than 1,900 barrels of oil per day (May 2015), a new  record for KRH. The leases are located in a very advantageous position, down-dip of the rest of the oil field, where gravity drainage of oil enhances recovery.

KRH employs the latest heavy oil recovery technology and equipment. Down-hole, packers and “limited entry” mandrels, provide for the efficient and accurate delivery of steam to multiple oil sand intervals simultaneously. This significantly accelerates the time required to recovery the oil, which leads to greater economy of scale (lower operating cost per barrel of oil) and increased present value.

All producing oil wells have large capacity pumping units and down-hole pumps controlled by variable speed controllers, which automatically adjust to changing production rates. The controller automatically slows the pumping unit when fluid volumes decline between cyclic steam stimulations or speeds up the unit when increased steamflood production occurs. The wells are always pumped off, insuring maximum possible production rates. Operating costs are also significantly reduced through the elimination of the need to change pumping unit pulley sizes.

Pipeline corridors efficiently collect production and casing vent gases and distribute steam in insulated lines to each automatic well test (AWT) site.

The associated water, produced along with the oil, is fresh and reusable. It is filtered and softened, becoming the source water for steam generation.

Steam is supplied by both the WPS plant and high efficiency, low emission, KRH steam generators. The fuel source for both, is natural gas supplied through the Kern River-Mojave gas transmission system at a price significantly lower (~10%) than available through local utilities.

Western Power & Steam, Inc.

Western Power & Steam owns and operates a 20 megawatt cogeneration facility. It is located adjacent to KRH in the Kern River field. Western Power & Steam provides up to 55,000 pounds per hour (3,750 bpd) of superheated steam to KRH and electricity to PG&E and KRH. The facility consists of a GE LM2500 gas turbine de-rated to 20 MW driving a 25,000 KVA Brush generator and a Deltak heat recovery steam generator rated at 70,000 lbs/hr. Western Power & Steam operates as a separate subsidiary and profit center.

New Ferne & Jerry Lee Facility

The Free Water Knockout (FWKO) vessel separates 98% of the oil from the water using heat, chemical and a baffle system. This is capable of treating 30,000 BBls/day of total fluid, very similar to the one at the Nukern lease. Once this facility is completed we will be sending the cleaned water from this facility up to the Nukern facility for filtering and softening to feed the new steam generators.

New Water System

We have purchased and are in the process of constructing a new water system capable of filtering 30,000 BBLs/day and softening 18,000 BBLs/day, very similar to the current water plant that is in service. Once the steam generators are up and running we will be connecting the steam system from the Nukern lease into the newly built steam system at the Ferne & Jerry Lee, starting theses steam flood and cyclic steaming of the undeveloped leases.

New Headers for Leases

We have built and installed two new headers (one for the Ferne lease and one for the Jerry Lee) and AWTs (automatic well testers) for each header. Existing wells are getting tied into the new header system which will eventually feed the new facility. We are also drilling 17 wells, most of which are on the Ferne and Jerry Lee leases. The steam generators- Two 85 million BTU dual pass generators capable of putting out 5700 BBls/day of 70% quality steam each, 11,400 total. In order to feed these two new generators we have built another soft water tank and increased our water processing capabilities.