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By simulating earthquakes, an Edmonton company believes it can boost oil recovery

by Lindsey Norris

In 1964 a major earthquake struck off Alaska, causing tsunamis along the Pacific coast. For 48 hours afterward, production at oil wells in Western Canada and the United States fluctuated noticeably. The same was reported during other seismic events going back to the 1950s, leading researchers in North America, Russia and China to look for ways to harness this effect to increase oil recovery.

Today, a great deal of investor chatter surrounds a small Edmonton company that may have finally done it. In a traditional field, around 60% of oil is left in the ground. Wavefront Energy and Environmental Services has patented technology that it claims is capable of extracting an additional 10%. “That 10% may not sound like a lot, but we believe this technology can be used on 200,000 fields in North America,” says Brett Davidson, CEO. “We’re not talking hundreds of barrels of oil. We’re talking thousands.” The fact that many investors have become believers explains the run on the former penny stock (WVF:TSXV) last spring.

The technology simulates a heart – when a heart pumps, it sends pulses through the body’s blood vessels, causing the network of capillaries to expand and contract. When a pulse is applied to the ground, it expands and contracts the porous rock, freeing the trapped oil. In one of Wavefront’s pilots, it increased the daily output of one declining reservoir from 120 barrels to 220 barrels per day.

This technology, called “Powerwave,” was developed by Kim Stanos, a University of Alberta professor (now retired) who worked with the technology in the laboratory for 16 years before he teamed up with Davidson, a technologist. The pair founded the company in 1997 and convinced an oil producer to let them test it in the field. They tracked down a $416,000 grant and contributed an equal amount of their own money.

The field test was successful. But it was March 1999 and oil was $9 a barrel. “We had a good theory, we proved it worked in the lab, we proved it worked in the field – and then no one was interested in oil recovery,” Davidson says. “We couldn’t have started this business at a worse time.” So Wavefront turned its sights to an area not subject to the whims of the market: the environment. The technologies are essentially the same, though branded under different names: Powerwave on the oil side, Primawave on the environmental side.

Primawave is used largely in the United States. The National Aeronautics and Space Administration once used it to clean up soil contaminated with tetrachloroethylene (dry-cleaning fluid). In the 1960s, NASA used the chemical to remove the soot generated by rockets from the launch site. Years later, the area was saturated with carcinogens. They knew how to remedy the toxicity of the soil: a mixture that included iron filings. The problem was how to get the filings into the ground. Enter Primawave.

Today, with “depressed” oil prices still topping $70 a barrel, Wavefront again sees its greatest growth potential in oil. Last year, the company had two clients; this year, it has 20; and by 2009, it hopes to have 200 tools in the ground across North America.

Davidson has reason to be optimistic. The first incarnation of the tool required two tractor trailers. But years ago, Davidson decided the firm would put everything on hold while it refined the technology. Thirty-six months later, it had made the tool only a metre high and eight centimetres in diameter. It leases the device to oil companies and ships it to them via courier. It’s easily assembled (no pricey engineers required). Wavefront charges oilfield companies $3,000 a month for a minimum 12-month period.

The future for Wavefront may involve spinning off a separate environmental company. But don’t expect to see Wavefront selling out anytime soon. “We don’t have an exit strategy,” Davidson says. “We didn’t put 10 years of blood and sweat into this company without intending to see a broad distribution across the world.”