Oil shale developer went public Monday
The parent company of American Shale Oil, which is working to develop oil shale in northwest Colorado, went public Monday at $9.33 a share, and by Tuesday the stock price fell to $8.20.
Colorado officials, meanwhile, approved the company’s plans for drilling in association with its oil shale efforts.
Genie Energy Ltd (NYSE:GNE) was spun off last month from IDT Corp., a global telecommunications company based in New Jersey.
American Shale Oil is testing its approach to oil shale on a 160-acre research, demonstration and development lease in northwest Colorado. Plans call for heating sections of shale in place beneath aquifers to avoid interference with groundwater to boil a petroleum-like substance, kerogen, out of the rock and into conventional production wells.
American Shale Oil’s process is one of several in-situ approaches to treating oil shale in place to release kerogen with minimal surface disturbance.
AMSO calls its trademarked approach the CCR, or Conduction, Convection, Reflux process.
The company estimates it can produce about 100,000 barrels per day of the equivalent of crude oil for 25 to 30 years with a total surface disturbance of only one square mile.
Howard Jonas, the chairman of IDT, also is chairman of Genie, which also has oil shale holdings in Israel.
“Our hope is that for investors interested in the energy business, we’ll give them a more pure play opportunity in oil shale,” spokesman Bill Ulrey said Tuesday.
The Colorado Division of Reclamation, Mining and Safety wrote Oct. 17 to AMSO officials clearing the company to go forward after questions had been raised about the casings for six wells. Independent testing “clearly demonstrates that adequate hydraulic isolation exists” to protect groundwater, and the division said in the letter it approved plans for four remaining wells.
Worries about the wells prompted American Shale Oil to take new measures to demonstrate the wells were properly cased, AMSO Vice President Roger Day said. The result was a new and better interpretation of drilling records, Day said.
“There are pluses that come out of these things,” Day said.