The 153-Year-Old Oil Well That Hasn’t Stopped Pumping Yet

33 Comments on "The 153-Year-Old Oil Well That Hasn’t Stopped Pumping Yet"

shallowsand on Sat, 22nd Nov 2014 8:24 am 



Surprisingly there are many wells in the United States which have been producing for over 100 years and are still profitable, even at oil price levels below the current price. There is a family where I live that still uses powers and rod lines to pump their wells and it is not just a historical exercise, it is how they earn a living. Pretty neat if you are into historical things.

rockman on Sat, 22nd Nov 2014 9:30 am 



And the country owes “garbage operators” like shallow thanks for the contributions from our stripper wells. In case it isn’t obvious the reason these wells are still producing is real sweat equity. Often these operators pay little or no salaries…they do most of the heavy lifting themselves. Which is why the big companies sell off to folks like Shallow: if they have to pay someone to handle these wells they’ll lose money.

Consider the field where I’m currently drilling my hz wells. When I drilled my first hz well there were 6 wells producing in the field that are 72 years old. In total they were making 12 bopd and about 1200 bbls of water per day. A 1% oil cut… true “brown stained water”. In addition to high oil prices keeping the operation profitable the salt water disposal wells were drilled decades ago and allows the cheapest way to get rid of the water.

My hz well in the same conventional reservoir initially tested 300 – 600 bopd. Similar hz efforts have been tried in this trend over the last 20 years. The Rockman’s well was the first commercial success. Last week another operator drilled a hz well like mine in the next field on trend and it flowed 250 bopd. They already owned the field and didn’t want to sell it or let us participate. I did give the some advice as a matter of professional courtesy. Might as well: they knew which service companies worked on my well and could get the information from them. The secret wasn’t so much how it’s done but that it was possible. Given that the state requires the public release of the production of my hz wells other operators learned that this approach worked. How profitable the method proves to be remains to be determined.

So good news as far as adding a bit of domestic oil production. The bad news is that the technique might only ultimately recover only an addition 3% – 4% of the original oil in place. OTOH the fields in this trend originally had 8+ BILLION bbls of oil in place.

And the main reason for the Rockman’s blatant bragging is to explain that even though he was drilling commercial hz wells in old conventional NG reservoirs 20 years ago he wasn’t able for the last 10 to talk anyone into trying it in this trend until oil prices got high enough: I used the exact same technology I would have used 10 years ago. Just as all the current hot shales plays could have been drilled 10 years ago.

New technology has little to do with the increase in US production. It has simply been the higher price of oil.

Nony on Sat, 22nd Nov 2014 10:02 am 



Was reading some old TOD posts just now. Rock was negative on the EF in 2012. It seems like the well quality has not deteriorated as his early analysis showed. (Granted he had caveats that his analysis was early.)

http://www.eia.gov/todayinenergy/detail.cfm?id=18171

Nony on Sat, 22nd Nov 2014 10:35 am 



Slight segue: Reading Rune’s REd Queen article from JAN2013 (so touted, it was RERUN!) is fascinating.

http://www.theoildrum.com/node/9748

The Bakken sure DESTROYED his 600,000-700,000 (ND only) prediction.

And the scoffing at Filloon. Who is laughing now? HAHAHA! 😉

Oh…even (midway down in comments), Rune posts the EIA prediction that has US oil going to peak at 7.5 MM bpd in 2015. We’re kissing on 9+ in late 2014.

Pffffft!

oilystuff on Sat, 22nd Nov 2014 10:49 am 



Who coined the term “garbage operator?” I have never heard that term before. Its ugly. I am proud of what I do; I use my own money, generate my own prospects, take the project from start to finish, from knocking on the door to make a lease to screwing flowline together; along the way I feed lots of families. Why don’t you use the term marginal stripper well operators? I may operate garbage, in your mind, but I am not a garbage operator.

Boat on Sat, 22nd Nov 2014 11:58 am 



Rock, please define new tech. 10 years isn’t that long ago. Sliding sleeves, multiple wells from the same pad. Using 3 engines the size of a locomotive for power and pressure commonplace in the 70’s? I won’t even get into all the little stuff like drill bits, 30+ fissures per line etc.

PrestonSturges on Sat, 22nd Nov 2014 11:59 am 



Selling it to a motor oil company? Penzoil maybe? Old mechanics used to say never use Penzoil, but it’s probably mostly synthetics now.

Nony on Sat, 22nd Nov 2014 1:13 pm 



If you look at productivity per rig, it has gone up in almost all the plays. This despite the comments about “drilling the sweet spots first”. My hypotheses:

1. The MASSIVE amount of recent hz fracked shale wells has driven better technology. But you have to broaden your thinking from “completely new invention” to tweaks and improvements (e.g. the “walking rigs”). Even to knowledge and skill of the operators. Yes, O&G is a field where you can get insights from decades before. But NO, an operator from the old Austin Chalk is not knowledge competitive with people that have recently EF/Bakken years of experience. Even operators and service companies say they are smarter now than they were in 2008. You have one old salt, Rock, who says nothing is changed and he knows it all. And a vast industry that says BS. I have to bet he would not even be 100% competitive to get a job in the shales. I’m sure he could get in somehow. But they would NOT be blown away with his AC background. And they WOULD think they have learned some things he doesn’t know.

2. Even in our geological understanding, there has been evolution. The sweet spots were not identified immediately and drilled first (Elm Coulee before the Sanish/Parshall). Or look at the Utica with the stunning gas find by Shell in NE PA (300 miles from the main action and just a couple months ago). We are still learning the rocks.

3. In some cases, we are learning how to combine 1 and 2 in specific plays. Do A in X part of the Bakken and B in Y part.

Nony on Sat, 22nd Nov 2014 1:31 pm 



I mean if ALL the technology was known and ALL the geology was known and the ONLY thing that enabled production growth was price, then why did completion practices change in the Bakken over time?

rockman on Sat, 22nd Nov 2014 2:51 pm 



“Rock was negative on the EF in 2012. It seems like the well quality has not deteriorated as his early analysis showed”. The Rockman was negative about the estimates of 350,000 to 500,000 bbls recovery from the average EFS completion. The latest estimate from the EIA is 168,000 bbls.

Seems as though the facts indicate pessimism over those early estimates was well founded.

ghung on Sat, 22nd Nov 2014 3:19 pm 



Bakken Sweet Spots Petering Out

http://peakoilbarrel.com/bakken-sweet-spots-petering/#more-5238

Nony on Sat, 22nd Nov 2014 3:53 pm 



1. (+) You were right about EUR being lower. 🙂

2. (-) You also said you were negative about the play. That has not panned out. 🙁

3. (-) Also, output per well does not seem to be dropping by year as you said. Look at cum curves by year group in the link I attached. They have gotten better every year. 🙁

rockman on Sat, 22nd Nov 2014 3:58 pm 



“Sliding sleeves, multiple wells from the same pad. Using 3 engines the size of a locomotive for power and pressure commonplace in the 70’s?”

Sliding sleeve: patented 22 years ago…more than a decade before the shale boom began.

Mule-well pad drilling: I was personally doing it in S La. 35 years ago. Many of the Austin Chalk hz wells in the 90’s had two laterals drilled in opposite directions from the same drill site.

Three engines the size of a locomotive? Are we talking frac trucks? Frac trucks are the same size they’ve been for decades. Frac truck size is limited by road regulations. The same restrictions as for 18 wheelers. Most of the frac trucks operating today have been in service long before the current shale boom. Higher injection pressures aren’t achieved by bigger frac trucks: it’s done by hooking up multiple trucks to pump a frac job. Using 10 to 20 frac trucks isn’t uncommon in the shale plays today. A typical frac job in a shale well today pumps 250,000 to 350,000 pounds of proppant per stage. In the 70’s I personally pumped a 500,000 pound frac in the Edwards formation in Texas that was several thousand feet deeper then the typical EFS well today. Thus we used significantly higher injection pressures then is common in the EFS today.

And slick water fracs? In 1997 Nick Steinsberger, working for George Mitchell, began pushing slick water fracs, long before the EFS oil play took off. BTW the original reason for developing SW fracs was because they were much cheaper then the way the industry had been doing it. Mitchell Energy was focused on NG production from the shales at that time…oil prices were too low. Just like everyone else in the biz back then, George knew there was oil in the EFS and knew how to drill and frac hz wells. Just wasn’t worth doing at oil prices back then.

BTW when I pumped that “mega-frac” in the 70’s Mitchell also did one about the same time. The gov’t paid for half of his expense and George got a write-up in the Wall Street Journal. My company didn’t get anything. George was much better at playing the PR game then most. LOL.

Bottom line: the equipment, chemicals and procedures used to frac EFS wells today existed before the shale boom started…when oil prices were much lower. Sorry…just more inconvenient truths. LOL.

Richard Ralph Roehl on Sat, 22nd Nov 2014 4:37 pm 



Two questions:

1. Will the oceans and biosphere of the planet continue to permit the use (combustion) of additional fossil fuel discoveries?

2. Can complex life forms presently living on the surface of Planet Over-birth Earth sustained (survive) the ongoing radioactive contamination horror of more nuclear fission time-bomb catastrophes like Fukushima?

Human baboonies are colorful, creative and imaginative… butt as a whole (and ass-a-hole) they lack prescience and common sense.

RRR

Nony on Sat, 22nd Nov 2014 4:46 pm 



It’s interesting in gas though that the shale drilling is actually competitive at relatively low prices. 4ish. I don’t think you can say that Marcellus hz-fracked wells were just waiting for price, are dependent on price, etc. That really was about the technology or at least the spread of applying it. Maybe it is a bit of a conservative industry and it takes a few years for new practices to spread. Perhaps the inherent variability of drilling masks some of the improvements and it takes time for people to gather enough data to really acknowledge improvements.

Boat on Sat, 22nd Nov 2014 5:25 pm 



Nony
I read the history of the drill bit just one small part of the operation. It was fascinating and ever evolving. I am sure many other parts of the operation have an equal important evolution history. Rock and yourself are a wealth of information but it is interesting he wants to split hairs on not recognizing incrementalimprovements.

Newfie on Sat, 22nd Nov 2014 5:31 pm 



A hundred years from now, in the post peak oil future, there will be many wells like that pumping 1/10 barrel a day and people will be fighting over it. Mad Max will happen.

nony on Sat, 22nd Nov 2014 6:03 pm 



Watch the okra whiskey video. Important to realize how tin foil doomer stuff like mad max sounds. Think how a normal person would react to these wild comments.

Davy on Sat, 22nd Nov 2014 6:09 pm 



NOo, said “Think how a normal person would react” Normal is not normal. Normal is scary.

shallowsand on Sat, 22nd Nov 2014 9:09 pm 



Oilystuff. I think ROCKMAN came up with the term “garbage” and although I really shouldn’t speak for him, I don’t think he means this in the way it may come across.

I’m personally not offended by the term although your suggestion is definitely better.

In reality, we should thank those spend big bucks drilling a bunch of new holes. They are creating numerous stripper well opportunities for “lesser operators”.

I think ROCKMAN pointed out that many wells of the 80s boom never paid out for those that drilled them. However, those wells created opportunities for numerous small business owners, who in many instances were able to pick them up for cents on the dollar of what they cost to drill. Those wells have since paid out many times over for the” garbage operator”. I think ROCKMAN knows that, and is not slamming anyone, but instead is in on the joke that deep down those promoters probably wish they had some “garbage” with a 2% decline.

Maybe I’m wrong, but in addition to the comments ROCKMAN made in the post above, I think I’ve seen posts of his discussing how good a deal it is for farmers and ranchers who are able to pick up the wells on their land and operate them on their own. Many folks who were able to do that in the late 80s and the 90s did pretty darn good in the last ten years.

I also hope something in between Mad Max and shortonoil’s hypothesis occurs. Don’t want to plug out the strippers nor build forts around them. Would have been nice to stay between 85-95 for awhile but weak economies and the shale drillers and their lenders, who didn’t want to be sensible, ruined that.

rockman on Sat, 22nd Nov 2014 9:53 pm 



Boat – “…he wants to split hairs on not recognizing incremental improvements.” Never said there haven’t been incremental improvements but totally reject the spin that we’re using some great advancements in tech to make the shale work. The basic tech is the same as when oil prices were much lower. Or let me put it another way: I can assure you that had oil been $90+/bbl in 1998 the shales would have boomed then.

If you’re interest Google “rotary steerable drilling”. That has been the one big advance in directional drilling that did have a significant impact. Not that we couldn’t drill the hz holes with mud motors. But RS drilling assemblies drill faster and thus same money. But again, it doesn’t allow us to drill wells we couldn’t do before.

Nony on Sat, 22nd Nov 2014 11:54 pm 



Then why did it take so long for the Marcellus to take off? After all it is economical at 2.50 gas?

Northwest Resident on Sun, 23rd Nov 2014 1:02 am 



Nony — “After all it is economical at 2.50 gas?”

Since we’re exploring the meaning of “garbage” in these posts, Nony must have decided to contribute a little to the pile with the above statement, or was it a question?

Evidence is pretty overwhelming that Marcellus shale gas has a very difficult time making a profit.

Can Shale Gas Ever Be Profitable?

In depth financial analysis. Recommends investment in coal. Strongly advises do not invest in American NG producers, and gives a list of shale producer names that he advises not to invest in.

“I maintain that the US coal sector is a much better investment opportunity, due to strong
international demands, recovering demands and aggressive production curtailments by coal
producers, and finally but not the least, the ongoing capital destruction in the shale gas industry
is leading to drilling activity falling off a cliff. A natural gas shortage could be loom in a few
months. That outcome is extremely bullish for both NG and coal. But since coal prices are
only moderately below profitable margin, coal producers stand to benefit the most, when a
natural gas price rally shifts demands back to coal in a few months.”

http://www.firstenercastfinancial.com/pdfs/101140.pdf

And a few others.

Very Little Cheap Natural Gas in New York Marcellus Shale …

“At current gas prices near $4.00-4.50/MMBtu (Million British Thermal Units), the results of this study indicate that no area in New York is likely to be commercially viable,” petroleum geologist Arthur Berman and petroleum engineer Lyndon Pittinger wrote in their report, which was commissioned by the League of Women Voters of New York State, adding that at $8/MMBtu, at most 9.1 trillion cubic feet of gas can be profitably drained from the Marcellus.”

http://www.desmogblog.com/2014/04/22/new-report-finds-marcellus-gas-costly-produce-raising-doubts-new-york-state

US shale is a surprisingly unprofitable miracle

http://www.ft.com/cms/s/0/3e56228a-2ce4-11e3-8281-00144feab7de.html#axzz3Js91PEMC

And this Financial Times article concludes with:

“In other words, yes, there is a big Marcellus effect, but it may turn out to have been superhyped by quantitative easing.”

In other words, without QE1, QE2 and QE3 trillion$ to “invest”, the Marcellus would never have taken off.

http://www.ft.com/cms/s/0/3e56228a-2ce4-11e3-8281-00144feab7de.html#axzz3Js91PEMC

Davy on Sun, 23rd Nov 2014 6:19 am 



NR, here is a useful NOo corn porn identification chart:

http://icwdm.org/inspection/Scat.aspx

Nony on Sun, 23rd Nov 2014 8:06 am 



Bwahahahaha! You’re citing Art Berman for his NY study. What a joke. The guy talked down the Marcellus in 2009 based on 18 months of Haynesville data. And it has exploded at 3 BCF/day/year for the last 3 years. Berman is about the LAST person to talk about the outlook in NY for the Marcellus. Sheesh.

Northwest Resident on Sun, 23rd Nov 2014 9:57 am 



Nony — I admit. My list of links provided could have been better. What can I saw. It was late last night when I posted that and I did it in a hurry. But still, my point is valid and there are much better sources of information that prove my point. You know what they are, I’ll let you find them on your own. Just do a google search on “why Marcellus is NOT mighty” and you’ll find them all.

Northwest Resident on Sun, 23rd Nov 2014 10:00 am 



Davy — Too funny! Yeah, very useful. I’ll be referring to that chart frequently from here on out.

Nony on Sun, 23rd Nov 2014 10:08 am 



NWR:

look at the graph in the bottom right:

http://www.eia.gov/petroleum/drilling/pdf/marcellus.pdf

Berman was criticizing the Marcellus in 2009! [Look at production in 2009 until now. Hmmm?] And he was doing it based on Haynesville and Barnett data. Sorry. Terry Engelder was right and Berman was wrong, wrong, wrong!

Northwest Resident on Sun, 23rd Nov 2014 10:43 am 



Nony — I admit. Many billion$ in junk bonds combined with waves of propaganda that enticed investors to put their truckloads of QE “money” into said junk bonds worked wonders in Marcellus. Engelder, Berman and others were just plain wrong about Marcellus. Those dopes failed to include in their calculations the obvious fact that of course the FED would print up trillion$ of new dollars to “finance” Marcellus, and of course they would take over the stock market and prop it up with manipulation and dozens of little tricks. How could they have been so blind to future realities.

Nony on Sun, 23rd Nov 2014 11:25 am 



1. In 2009, it was hard to imagine the Fed pumping in money into the economy?

2. The Fed has not directly underwritten any O&G loans or done any bailouts in this sector. Real estate (and investment bank speculators) were the sectors that were bailed out. You have failed to say why money going into the economy from (1) decided to head towards shale.

—–

Peakers screwed up MASSIVELY with their shale skepticism. If they don’t face the music, it shows they are biased. Well, hello! What do you expect from a bunch of basement dwelling Internet personalities??

Northwest Resident on Sun, 23rd Nov 2014 12:16 pm 



Nony — No, the FED did not invest directly into shale junk bonds. And the reason I have failed to say why money going “into the economy” decided to head towards shale is because I thought it was obvious to all.

First, a correction. QE money did NOT go into the general economy. The averages Janes and Joes on the street never got their hands on a dime of QE money. That fact, like the fact that QE money played a major role in financing shale plays, I thought was apparent and obvious to all — but not to you it seems.

Here’s a little reading assignment for you, then you’ll maybe understand.

Zero rates, resource misallocation, and shale oil

“The nexus of zero rates, resource misallocation, and risk on has favoured shale oil. But the drop in oil prices will call many of these projects into question precipitating a high yield energy funding crisis and a panic dash for the exits. There will be carnage and the question will be whether this carnage causes contagion into other markets.”

https://www.creditwritedowns.com/2014/11/zero-rates-resource-misallocation-and-shale-oil.html

“QE held the value of the Dollar down (in a time when it should have risen as safe haven), which stimulated demand for commodities and eventually increased their price, which has made U.S. shale production possible (or at least more profitable)… At any rate, it is not cheap to produce, and QE made more wells more profitable.”

http://nationalinterest.org/feature/the-federal-reserves-trade-war-stimulating-americas-energy-11476

From your favorite, Forbes:

9 Reasons Why Oil Prices May Be Headed For A Bust (predicting a drop in oil price back in June 2014)

“To prop up the global economy after the 2008 financial crisis, global central banks dramatically cut interest rates and printed trillions of dollars worth of new currency via quantitative easing programs. Extremely stimulative monetary environments increase the desirability of hard assets such as oil and other commodities because they are a hedge against currency debasement and the associated risk of inflation.”

http://www.forbes.com/sites/jessecolombo/2014/06/09/9-reasons-why-oil-prices-may-be-headed-for-a-bust/

And my personal favorite:

Where Money Goes to Die: How Fracking Blows Up Balance Sheets of Oil and Gas Companies (reviewing Bloomberg article titled “Shakeout Threatens Shale Patch as Frackers Go for Broke”)

“The financial hype around fracking, the limitless, nearly free liquidity provided by the Fed since late 2008, and investors so desperate for yield that they’re willing to incur just about any risks in their vain battle to come out ahead have had Wall Street frothing at the mouth. The sweeps of creative destruction have broken down. Instead, the boundless stream of money has been searching for a place to go, and it went to an economic activity – fracking – where money goes to die. What’s left is debt, and wells, especially gas wells, that will never produce enough to pay off the debt that was incurred to drill them.”

http://wolfstreet.com/2014/07/30/how-fracking-is-blowing-up-balance-sheets-of-oil-and-gas-companies/

Come on, Nony. Stop being such a dunce. “Basement dwelling internet personalities” is what you see when you look in the mirror. Why make me dig up all the info that proves QE money made the shale “revolution” possible, when you could just open your eyes and ears and see it yourself?

Nony on Sun, 23rd Nov 2014 1:36 pm 



NR, go sit on the fantail and man the mail buoy watch. I’ll call you when I need a left handed monkey wrench. 😉

peterev on Sun, 23rd Nov 2014 4:18 pm 



Hello Noony,

In 2004, Matt Simmons and Saudi Aramco went toe to toe about peak oil. The upshot of it was that the Saudis said that at 10 MBOD, the would not go into decline until after 2042(?). At 12 MBOD, they would not go into decline until after 2034(?). At 16 MBOD, they would go into decline after 2025.

Both Simmons and the Saudis recognized peak oil. Their major differences rested on “when”. Simmons is his “Twilight in the Desert” said it would be sooner along with others who thought the Saudis had 157(?) billion barrels of reserves instead of 250(?).

How come you can not recognize what they see???