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Page added on March 24, 2013

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The Best Places To Find Oil Are The Oldest Places

Geology

It’s an old oilfield maxim: The best places to find oil are in spots where it’s already been found.

It’s proving true time and again in the North America oil business as small and large operators strike renewed bonanzas in West Texas, Oklahoma and other parts once perceived as past their prime.

Of course, an oilfield’s peak has always been more a matter of economics,  and the oil business has always had a separate class of operators eager to take the last “squeeze of the orange” after initial production has declined.

These small operators combine a lean operating ethic and a toolset designed to make a profit on that last bit of juice.

Now in a period of sustained $90-$100 a barrel oil prices, a lot of old fields start to look profitable.

That now includes Spindletop, the most iconic oil gusher in American history. As the Houston Chronicle first reported, a pair of private operators are doing the research and fundraising to take another squeeze at the Spindletop field.

E&B Resources of Bakersfield, California, and International Petroleum LLC of Salt Lake City, Utah, plan to drill a well there this summer.

The companies, 50/50 partners in the deal, are currently looking for a bigger capital partner before commencing drilling, said Bryon Wixom, president of International Petroleum. The companies are in discussions with potential partners, on that front, he says. A new well there is projected to cost up to $8 million, the Houston Chronicle reported.

E&B, the bigger of the two partners, specializes in enhancing oil recovery from producing properties. It has assets in California, Louisiana, Kansas and Wyoming. International is interested in wells in the Rockies and the US Gulf Coast.

Spindletop is only the latest old field targeted for new activity. Pennsylvanians will always counter Texas’ claim as the birthplace of the oil industry, and it’s no accident that the Marcellus field has been developed there, and West Texas’ Permian Basin has seen more booms and busts than a fireworks show at an art museum.

Perhaps some enterprising geologists should take some time away from their seismic logs to look at the history books.

Forbes



4 Comments on "The Best Places To Find Oil Are The Oldest Places"

  1. rollin on Sun, 24th Mar 2013 2:11 am 

    Looks like a sign that the oil companies are out of options and need to use fracking and EOR on tight or old oil fields. With the price of oil up they are taking a chance on making profit.

    A little confusion in there, the Marcellus field is a natural gas play not crude oil (although they are calling just about anything oil now).

  2. BillT on Sun, 24th Mar 2013 3:06 am 

    Of course $100 oil will open less profitable spots at $20. And $200 oil will open a few more plays to possibilities, but at that price, demand will be so low that it may not be needed. The oil game is about over.

  3. Arthur on Sun, 24th Mar 2013 1:03 pm 

    There will be a lot of demand for oil even at 200$/barrel prices, as long as there is not a viable alternative, as for these 200$ you still get 8 man year equivalent of work, a bargain for 200$.

    But there will not be economic growth.

  4. Kenz300 on Sun, 24th Mar 2013 4:54 pm 

    The era of cheap oil is over.

    High prices make all alternatives look better every year.

    The price for oil, coal and nuclear keeps rising.

    The price for wind and solar keeps dropping.

    Easy Choice.

    http://www.bloomberg.com/news/2012-01-18/renewables-to-grow-more-than-8-a-year-through-2030-bp-says.html

    Renewable-Energy Growth to Outpace Oil, Gas Through 2030

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