MegaWest Energy Corp. is a heavy oil player that is targeting Missouri, Kansas, Kentucky, Texas and Montana. It uses a variety of recovery methods on its core areas.

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MegaWest Energy Corp. is unusual in that it is a heavy oil player based in Calgary, Alberta, Canada, yet its prospects are in the United States. “We speak of corporate amnesia where companies have forgotten these properties they used to chase,” President R. William Thornton says. “If you look at the continental United States, the [oil majors] that used to play here are not doing a lot of oil exploration outside of California. They’ve moved on to large international projects or deepwater projects with larger prizes.”

The areas that MegaWest targets – Missouri, Kansas, Kentucky, Texas and Montana – require modern thermal recovery measures to be commercially viable. “The companies that are left in the mid-continental United States do not have the expertise in thermal recovery techniques that MegaWest has,” Thornton notes. “What makes us unique is we brought together experts from the Canadian oil patch, which is focused on heavy oil, and took them to properties in the United States that have been proven to contain oil.”

It was a risky endeavor in the sense that the Canadian marketplace is facing fierce competition for high-skilled oil technicians. “It was a bit of a bold step for us to hire a team to work on a property that is not a Canadian property,” Thornton admits. “Until you have seen it and done it, it is hard to imagine how profitable these projects are. But, by our internal estimates, we have about two billion barrels of oil in place under the lands we currently own. That amount of oil is substantial in terms of the capacity we have to create a large company.”

Key Advantages
After it was founded in December 2006, MegaWest took on the market with a vengeance. “We’re just over a year old and we’ve acquired over 115,000 acres of total leases,” Thornton says. “Our first oil sales were on June 13, 2007. We’ve gone through the entire process of licensing, construction and starting up our first standalone project within a year of being established; whereas, you can take anywhere from three to five years to get a project going in Canada.”

And, because the areas where MegaWest’s properties are located have previously been tapped into by the oil majors, refineries are still at hand. “The presence of these oil refineries is important to us because many have adjusted their capability to be able to refine heavy oil,” Thornton says. “Our proximity to these refineries means that our value is much higher than you would get for heavy crude in Canada.