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Kern River Holdings, Inc.

Wednesday April 29th, 2015

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.

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