The other day, I wrote about the prospects of Gasfrac Energy Services, Inc. (GFS:CA or GSFVF on the Pink Sheets) for growth in the market in the United States. There is now a very important bit of news that has to be added to that analysis. Chevron Corporation has confirmed that it tested teh GasFrac process on five wells in the Piceance Basin in Colorado. The company also said that it is evaluating the results. A full article about this development can be reached by clicking on the title to this post.
This is extremely good news for GasFrac. Obviously, it would be even better were Chevron to report that after a full review it was switching to fracking using liquid propane. Nevertheless, for a major like Chevron to be using the process gives management a big selling point with the rest of the market. Further, if Chevron decides that it gets better results with liquid propane, we could soon see a long term contract for GasFrac.
On the downside, if Chevron decides that it will not be using the GAsfrac method, it would probably slow the momentum for GasFrac in the USA. Assuming, however, that all of the data released by the company that shows higher yields and quicker productive use for wells completed with liquid propane rather than water based fluids, Chevrom should adopt the GasFrac method.
Disclosure: I am long GasFrac stock. It is one of the larger holdings in my accounts.
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