Paradise Ridge is an Enhanced Oil Recovery (EOR) company whose primary objective is the re-entry and re-working of existing oil and gas wells. We are not an "exploration company" in the sense that our business and our methods do not involve an attempt to explore for new oil deposits, but rather to exploit known oil and gas fields. Our objective is to existing wells, investing resources to yield increased production, thus mitigating the risks associated with drilling and attempting to bring new wells online.
The recent downturn in worldwide oil prices from $100 a barrel to today, has resulted in dire circumstances in the U.S. domestic oil industry. Large multinational corporations continue to sell off assets to pay down bank debt, lay off staff and close operations to consolidate. The fate of the small, independent producer is even worse. Faced with the inability to raise capital from traditional lending sources such as banks, small operators either go bankrupt or barely hang on to what little production they have. Today, there are tens of thousands of oil wells in California, Texas, Louisiana, Oklahoma and Kansas that have been reduced to “stripper well status”—a marginal oil or gas well that is nearing the end of its economic life.
Small producers need to recomplete their wells to remain in business but lack the cash flow required to do so. Many of these once profitable oil wells are being prematurely plugged and abandoned. The Paradise Ridge business model is to provide the small CAPEX required for these recompletion efforts to the mutual benefit of both well-owner and Paradise Ridge.
Historically, domestic wells produce an average of 50 to 100 barrels per day. An individual oil field tends to produce at its maximum rate at the start of its life. This production rate eventually declines at a rate that depends on the oil reservoir and the type of drive mechanism. In order to maintain production levels, most will at some point require recompletion efforts to boost production back to former levels. Recompletion often involves stimulation of the reservoir, perforating old or new casing, and completing sections of pay often overlooked in upper or lower reservoirs to liberate the hydrocarbons. There are many opportunities, as wells decline below economic levels, specifically in reservoirs above 5,000 vertical feet where recompletion costs are low.