In the world of new, clean energy development, lithium is often referred to as ‘white gold’ or ‘white oil’ due to its colouration and growing role as one of modern society’s most important commodities and energy sources.
Oil and lithium, two key energy sources, have a close relationship geologically through petrolithium – a lithium derived from petroleum brine.
For decades the mineral-rich salt solution, which is brought to the surface during oil and gas production and exploration, has been considered a hindrance.
Petroleum companies have been forced to manage petroleum brine as a waste product, usually by reinjecting the brine back into the ground for enhanced oil recovery or disposal.
However, with lithium’s growing value and importance, companies have identified petrolithium as a significant commercial opportunity, particularly in the US.
While many critical minerals explorers are trawling through historic journals, several US companies have identified ancient oil wells offering an opportunity to unlock lithium riches.
In recent years, several companies have explored technologies to extract the abundant minerals that are found in brines, including from petroleum brine. These minerals include lithium, silicon, magnesium, and potassium.
New acreage rush
Emerging companies such as Anson Resources (ASX: ASN) and Mandrake Resources (ASX: MAN) have been snapping up new exploration licences in areas with a significant oil and gas production history.
Anson on the move
After a successful campaign of results from well logs at its Paradox lithium project in Utah, Anson is applying the same strategy at its new Green River lithium project by re-entering existing oil wells to define lithium brine resources.
This would contribute significant additional resources to Anson’s global Paradox mineral resource base.
Located 50km northwest of the company’s flagship Paradox lithium project, Green River comprises a total of 1,251 placer claims over a total area of 106.2km2 and has been shown to exhibit positive geological, metallurgical, and structural similarities with the Paradox project.
New land application
Anson recently revealed it has signed a letter of intent (LOI) to enter a purchase and sale agreement for the strategic acquisition of 0.568km2 of privately owned industrial use land at the Green River lithium project.
The company plans to use the new site as the location for a future lithium extraction and production facility for its proposed lithium producing operation at the Green River project.
Mandrake makes a move
Mandrake Resources (ASX: MAN) is also moving ahead quickly to identify lithium via ancient oil wells.
The company has undertaken a recent study of historic US oil and gas wells to ascertain their potential to supply a new style of energy source, lithium.
Mandrake recently undertook a detailed field inspection of a range of existing oil and gas wells at its 100%-owned Utah lithium project to assess their potential to be re-entered for the sampling of brines to determine lithium concentrations.
The Utah lithium project is in the northern Paradox Basin where oil and gas companies have operated for over 100 years. Historical information from exploration and production drilling has provided the company with an abundance of opportunities to assess which historical wells can be re-entered to collect brine for assaying and mineral processing test work.
Mandrake estimates that re-entering an existing well is up to 10 times cheaper than drilling a well, making the re-entry approach a highly attractive exploration option.
To date the company has identified a minimum of six wells as high priority candidates for lithium sampling re-entry.
In the initial phases, the identification of candidate wells incorporated a detailed review of local geology, stratigraphy, and the analysis of petrophysical logs from dozens of local oil and gas wells (many of which have been digitised and processed to approximate porosity values in various zones).
New drilling agreement
In early June, Mandrake announced it had engaged Vanoco Consulting LLC to provide drill engineering and wellsite management support for its forthcoming re-entry and sampling programme across a number of historical oil and gas wells at the Utah lithium project.
Vanoco is a leading consulting firm based in Denver, Colorado which provides support to oil and gas operators in the United States and Canada. It specializes in providing engineering, project management, and field supervision for the oil and gas industry.
Through its Canadian parent company, Vanoco recently managed a significant lithium brine sampling programme in Saskatchewan, Canada on behalf of a listed lithium company.
Mandrake says Vanoco’s wide range of expertise will enable the company to progress its field activities and re-enter and sample historical oil and gas wells (recently made available through the well access agreement executed by the company with local oil field owner Paradox Resources.)
Vanoco has commenced the engineering review of the initial wells selected for re-entry and sampling and is evaluating initial workover plans generated by Mandrake.
Mandrake is now evaluating an initial truck-mounted well logging programme, which would provide a series of datasets crucial to providing more information on current well configuration and target zones likely to host lithium-rich brines.
Mandrake has also received bids from multiple drilling contractors for the forthcoming workover programme, all of which have indicated rig availability in the coming months.
Canadian plans
Indigo Exploration Inc. (TSXV: IXI) is another emerging petrolithium brine explorer with 147,904ha of metallic and industrial minerals permits in central Alberta, Canada.
The company’s three primary lithium projects are Fox Creek (114,522ha), Leduc (23,488ha), and Peace River (10,048ha), which are located within the heart of lithium exploration and development in western Canada.
The Fox Creek project is located adjacent to active exploration and development work being undertaken by Lithium Bank, namely their Boardwalk and Park Place projects.
The Fox Creek project covers an area of 114,522ha and is comprised of the Fox Creek East (45,568ha), Fox Creek West (59,738ha), and Fox Creek Central (9,216ha) areas. Indigo’s exploration and sampling programme will target 10 to 15 wells in each of the Fox Creek East and Fox Creek West areas.
These areas are targeting the Devonian-aged reefs, including the Swan Hills member of the Beaverhill lake formation, which is both a prolific formation to produce hydrocarbons, but also has the highest consistent lithium concentrations according to sampling data from the Alberta geological survey. Following the completion of the sampling, a reservoir characterization and hydrogeologic mapping programme will be completed utilizing well control and seismic data to model the reservoir, which in conjunction with sampling assays, will form the foundation of the resource estimate.
