EnerMax Inc. founder and President Bret Boteler stands next to his first well drilled in excess of 17,000 feet.

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Late last year, a Texas-based oil and gas company became privy to a discovery that could change the industry’s view of potential reserves remaining in the Permian Basin. EnerMax Inc. considers itself “a company always on the lookout for market opportunities.” It’s no surprise, then, that when a prominent independent geologist began searching for a company he could trust with a groundbreaking proprietary filtering technique, he found EnerMax.

The story begins when a geophysicist with more than 37 years of field experience began experimenting with a process used to locate oil and gas reservoirs. The process involves converting raw seismic data into meaningful “seismic signatures” using algorithms. Remarkably, he noticed previously unrecognized seismic signature patterns in the Permian Basin that indicated the presence of “sweet spots” or areas likely to contain oil and natural gas.

To isolate these target areas, he developed two proprietary filtering processes targeting two separate oil and gas reservoirs. The filtering processes are based on geological structure, amplitude, porosities and coherencies. “Historically, sweet spots in the region have not been identifiable using traditional geological and geophysical models, and were therefore drilled using the ‘hit or miss’ approach,” says EnerMax founder and President Bret Boteler. “Using the proprietary filtering technique, we have created a grid indicating where, and where not, to drill.”

To date, the most prominent filtering process has resulted in an 80 percent success rate in locating commercially productive oil and gas reservoirs, Boteler adds.

While keeping this new information private, EnerMax quietly secured acreage in the areas revealed as the most prolific on the drill grid. EnerMax presently holds leases on 2,300 acres in the Permian Basin – an area that accounts for approximately 20 percent of all U.S. production.

A Maximum Edge
“Our proprietary filtering technique provides a technical edge over our competitors, but the technique is only a tool, and a tool is only as good as the person using it,” COO Steve Rackley says. “Fortunately, our technical personnel make sure we utilize our resources intelligently, while our experienced management team ensures our day-to-day operations run smoothly. Both sides of our team – technical and management – are always looking to the future, laying the groundwork for the next phase of growth.”

Neofirma Inc. CEO Jim Holder sees companies winning the competitive battle and servicing their clients better by having office operations that are both efficient and effective. “EnerMax has selected and uses NeoFirma’s OperationMaster to give its employees information faster and more accurately, enabling them to make decisions and work together better,” Holder notes.

Boteler says its corporate structure is another advantage that EnerMax has over its competition. “We are a company that operates very efficiently, and that makes us extremely agile,” he notes. “When opportunities arise, we make decisions quickly and capitalize on those opportunities in a very timely manner.”

“This is advantageous given the volatility of commodity prices,” Boteler explains.

“According to the Energy Information Administration, commodity prices are in a long-term uptrend. Estimated world production rates are currently at around 85 million barrels of oil per day, while the U.S. Department of Energy’s figures indicate that consumption is approximately 85 million to 86 million barrels. If these figures are correct, demand is nearing or exceeding production capacity. As supply constraints continue to tighten, oil prices will rise and become more vulnerable to geopolitical and weather-related production interruptions.

“Drilling projects that were once too expensive to pursue will become economically viable,” he adds. “To prepare for volatility in the market, we run a cost analysis for each of our projects based on various commodity price points.”

For Maximum Results
Staying ahead of the curve on trends is so important that EnerMax has made it one of its guiding principles. “We commit ourselves to strengthening the value of our partners’ holdings,” the company states. “To accomplish this, we react quickly to trends within the industry and strategically position ourselves to take advantage of new business opportunities.”

One example is the company’s decision to use out-of-the-box thinking with respect to an opportunity in central-west Texas. There are a significant number of reserves in this area, but historically have been passed over due to technical complications. “When oil was $30 a barrel, everybody abandoned this area because it was not commercially viable,” Boteler explains. “Even when oil hit $60 a barrel, it remained inactive.

“With oil prices at record highs, and all indications that they will continue to remain so for quite some time, we looked at the technical challenges and determined that we can efficiently and economically retrieve those reserves.”

EnerMax has obtained leases on 10,500 acres in productive areas of central-west Texas and plans to expand its holdings over the next year, he adds.

Instrumental to its future growth is EnerMax’s decision in fall 2007 to partner with Seisma Oil Research, based in Florida. Seisma specializes in providing high-quality domestic drilling prospects to its international partners.

According to EnerMax, Seisma found its match. “In this complex energy market, we are consistently developing oil and gas prospects that have a solid geological foundation and risk/reward profile,” Boteler says. “With our team’s ingenuity and the advantage of technological innovations, Seisma has the ability to offer high-quality oil and gas prospects to its international partners.”

To the Max
EnerMax is poised for significant, immediate growth, according to Boteler. “Our current holdings in the Permian Basin and central-west Texas will allow us to drill in excess of 125 wells, which have a reserve potential in the range of 40 million barrels of oil,” he says. “For a company this size, that is a tremendous opportunity. The challenges we face in this industry are difficult, but ... [we] will continue to gain significance as we move forward.”