“Drill for oil? You mean into the ground to try and find oil? You’re crazy.” This was the reaction of prospective recruits by famed oil driller, Edwin Drake, the man now credited with launching the modern oil industry in 1859. Many people were first skeptical of Drake’s idea to drill for oil to lubricate machinery instead of collecting it from naturally-occurring oil seeps. They even called it “Drake’s Folly.” But the entrepreneur’s commitment to his idea has since exploded into a more than multi-billion dollar global industry.
The skeptics didn’t stop Edwin Drake. He knew that his innovative idea would prove valuable for himself and for anyone who found oil as a useful product.
Skip forward 150 years. The oil industry is booming across North American shale plays and around the world. Both large and small, independently-owned oil exploration and production companies are operating around the clock to find oil and pull it out of the ground at record rates.
Today, as the shale boom slows, operators must carefully manage operating expenses (OPEX) in order to stay profitable. Innovative practices that allow for efficiency are a key part of this formula.
Helping operators to maintain efficiency through innovation is what the engineers at Flo-Rite Fluids were thinking about when they took the basics of a legacy technology in the oilfield, that of magnetic fluid conditioners (MFCs), and revolutionized the industry with their field-tested, proven patented products.
And they haven’t stopped yet. They are still perfecting new versions of their product and applying for patents on a regular basis.
MFCs have been used in the oilfield for most of the past half-century as a means of paraffin and scale removal in pipes, most times as an alternative to (or in conjunction with) hot oil and water cleanouts, chemical injection or acidizing. Because past magnetic technology use in the oilfields was often inefficient and lacked a consistent outcome, Flo-Rite Fluids founder John White took existing technology, tested it, re-engineered it and created a product that now works so effectively that his company stands behind it 100 percent with a guarantee that it will remove paraffin and scale once it’s installed. White, like Edwin Drake, didn’t let skeptics keep him from continuing to develop his product. He knew that the innovative, environmentally-friendly Flo-Rite MFC worked. Period.
How Flo-Rite MFCs work
The engineers at Flo-Rite, after exhaustive testing, discovered that both design and placement of their MFCs are the elements that contribute to their outstanding performance. Flo-Rite MFCs are constructed using permanent rare earth magnets and are custom-designed using corrosion-resistant stainless steel rather than the carbon steel used by other companies. Flo-Rite MFCs are constructed with a rectangular inner tube, rather than circular, through which the fluid is forced at a high enough velocity to prevent crystallization and precipitation. Employment of the Lorentz force on the fluid passing through the MFC changes the molecular structure and exerts a polarizing and stabilizing effect, virtually eliminating paraffin and scale formation and deposition.
The Flo-Rite tool is placed directly in the bottom of the pump. The screen and/or gas anchor are placed in the bottom of the Flo-Rite tool. Surface units are placed at the well head or circulating pump. 100 percent of the fluid passes through the tool, which means every drop of fluid is treated to remove paraffin and scale, often in just a few weeks. It works equally as well in both horizontal and vertical wells, giving operators a huge leg up with OPEX costs.
“For our customers, this means lower operating costs, the elimination of any chemical spills and a dramatic reduction in downtime,” said White. “In addition, there is no electricity involved, eliminating the need for additional on-site power supplies, and increasing safety at the site.”
With everyone’s eye on the bottom line during this most recent downturn, the savings to the end user are dramatic, with one current customer reporting up to $400 per well per month, a savings of over $100,000 a month for the 250 wells he manages. This averages an estimated savings of $1.2 million per year for this field.
“We made the decision long ago not to sell our equipment, but rather to rent it as a performance-based product,” White said. “We’ll offer it to our customers on a 30-day free trial. If it doesn’t do what we say it does, we come and get it. I can tell you that doesn’t happen much. Once they see how much money they save even during that initial 30-day trial period, they want it in their wells.”
“The cost savings and environmental impact are phenomenal,” said John W. White, CEO of Flo-Rite. “Our MFtools are 100% green. And because we can remove scale and paraffin magnetically, rather than using hot oil or chemicals, we are saving our customers thousands of dollars each month.”
The cost savings is phenomenal, not just in the reduction in CAPEX by not having to purchase equipment, but also by not having to spend money in bi-weekly hot oil and chemical treatments. Chemical costs per well are about $600 to $1,000 per month. Hot oil treatments are about $1,000 per well. So simply to keep a well operating cleanly, operators would spend around $1,500 to $1,700 per month per well. Rental of a Flo-Rite MFC costs on average about $250 per month, resulting in an average of between 60 to 80 percent savings per well. Add that up for your typical field, and you can see where the savings start to make a huge dent in operating expenses.
Moving Forward: Research and Development
The nature of pulling oil from the ground is changing, but ever so slightly. Most of the methods used today are the same as they were a century ago. But new technologies are coming online every day, and Flo-Rite has the expertise in R&D to keep up with the changes. “We are always thinking of ways to improve the tool,” White said. “Because we do everything in-house, everything is custom-made. That’s why if a customer has a unique need, say a pipe with a different outside diameter, we can customize it to meet their specifications. Our most commonly used MFCs accommodate the standard sizes of producing flowlines, tubulars, and pumps.”
Because there is no power required to operate the tool, it seems a natural fit for offshore use, and while that segment of the domestic offshore industry has slowed during the downturn, Flo-Rite has been looking into the offshore markets globally as a means to place their equipment. Hot oil treatments are generally only effective to about 1,800 feet in depth. Offshore drilling goes far beyond that, often times deeper than 10,000 feet. Flo-Rite’s MFCs need only fluid passing through it to be effective, so depth isn’t an issue.
“The solution we provide is paramount to keeping costs in line, being environmentally conscious and maintaining a healthy bottom line,” White said. “Having a Flo-Rite tool at the bottom of each well will treat every drop of fluid before it ever reaches any equipment. It doesn’t add or subtract anything from production, it only alters what is already in it, and gives the operator a cleaner, more productive well at a much lower cost.”