MCW Energy Group Limited involved in the development and implementation of oil sands extraction technologies, through MCW Oil Sands Recovery, LLC, ("MCW Oil Sands") today announced further details of its projected oil sands processing costs in the advent of world oil prices under $ 50.00 USD per barrel.
During the latter part of 2014, MCW had assessed its average cost of processing oil sands feedstock at approximately $ 35.00 USD per barrel. This cost was determined when oil prices were in the $ 95.00 - $ 105.00 USD range per barrel. MCW's processing costs have now been projected downwards to $ 28.00 USD per barrel, mainly due to lower costs of the petroleum products being used in the extraction process, such as solvent blends, diesel fuel, liquefied propane, heating oil and natural gas condensates. All of these energy/processing component prices have fallen in tandem with the current dramatic fall in world oil prices. Condensate prices are down 50%. Solvent blend, diesel fuel and propane prices are down an average of 40%.
"Unlike the high production costs and lower energy efficiency levels associated with the mega oil sands projects in Alberta, MCW is in a unique position to take advantage of this unexpected 'silver lining' of lower petroleum product prices," stated MCW's CTO, Dr. Vladimir Podlipskiy, who provided the Company's newly projected processing costs. He added, "Not only have we reduced the costs of these components by 18%, we've also enhanced the automation of our proprietary extraction process, which effectively reduces our labour costs by 20%."
As a result of these lower processing costs, MCW's management team is confident that the Company can turn a profit with its lower fuel/solvent costs and a streamlined extraction process, despite oil prices below $ 50.00 USD per barrel, while other unconventional oil sands projects are either being delayed or cancelled outright. MCW is currently preparing to commence production with its initial extraction plant in Asphalt Ridge, Utah this month and is currently in negotiations for the funding of a 5,000 bbl/day extraction plant as part of its 2015 - 2016 scale-up phase production program.