‘Drilling programs and shallow well development in focus for profitability’

Dublin OH, February 12, 2015 — Cardinal Energy Group, Inc. (OTCQB: CEGX) sets its business strategy for 2015. Secondary recovery methods and developmental or in-field drilling on existing acreage will continue to be the focus of operations for the foreseeable future for Cardinal. Our secondary recovery methods allow the company to withstand low oil prices and continue profitability.

Conservative management and attractive asset choices also leave Cardinal in a great position to survive price downturns and capture any volatility-related upsides. Cardinal has positioned itself to be profitable with its assets in both high priced and low priced environments. Cardinal will continue to offer accredited investors an opportunity to partner with the company through our Direct Participation Programs.

Timothy W. Crawford, the Company’s CEO comments, “Our ultimate aggressive production profile in our two pronged strategy should lead us into profitable quarters for years to come. We will continue to seek assets that are opportunistic when assets are available in the market that meet our criterion. We will continue our shallow oil drilling programs on our existing acreage in Central Texas, with the drop in oil prices drilling and completions costs have also come down significantly. Utilizing secondary recovery methods along with shallow oil drilling we have been able to keep our finding and lifting costs at approximately $15 per barrel”

Crude Oil Development
Crude oil development and production in U.S. oil reservoirs can include up to three distinct phases: primary, secondary, and tertiary (or enhanced) recovery. During primary recovery, the natural pressure of the reservoir or gravity drive oil into the wellbore, combined with artificial lift techniques (such as pumps) which bring the oil to the surface. But only about 10 percent of a reservoir’s original oil in place is typically produced during primary recovery. Secondary recovery techniques extend a field’s productive life generally by injecting water or gas to displace oil and drive it to a production wellbore, resulting in the recovery of 20 to 40 percent of the original oil in place.

However, with much of the easy-to-produce oil already recovered from U.S. oil fields, producers have attempted several tertiary, or enhanced oil recovery (EOR), techniques that offer prospects for ultimately producing 30 to 60 percent, or more, of the reservoir’s original oil in place. Three major categories of EOR have been found to be commercially successful to varying degrees:

  • Thermal recovery, which involves the introduction of heat such as the injection of steam to lower the viscosity, or thin, the heavy viscous oil, and improve its ability to flow through the reservoir. Thermal techniques account for over 40 percent of U.S. EOR production, primarily in California.
  • Gas injection, which uses gases such as natural gas, nitrogen, or carbon dioxide (CO2) that expand in a reservoir to push additional oil to a production wellbore, or other gases that dissolve in the oil to lower its viscosity and improves its flow rate. Gas injection accounts for nearly 60 percent of EOR production in the United States.
  • Chemical injection, which can involve the use of long-chained molecules called polymers to increase the effectiveness of waterfloods, or the use of detergent-like surfactants to help lower the surface tension that often prevents oil droplets from moving through a reservoir. Chemical techniques account for about one percent of U.S. EOR production.