Kenny, good to hear from you.
Well, scanning over the information from the press releases, I would guess that this
new technology may have an application for shallow wells.
But be advised that the price of oil is not the only controlling factor for stripper wellls
inTexas. Oil properties in this state are taxed (by the county) for their remaining
reserves, not the amount of oil produced. This is called the "ad valorem" or "school"
tax. Basically, a state-employed petroleum reservoir engineer will determine the
amount of recoverable oil left in the ground and the oil company is accordingly taxed.
This is the reaason so many of these wells are permanently abandoned, rather than
simply shut in or suspended until the price of oil recovers.
Now beam pumping, contrary to what they say, is actually pretty efficient. And if
you're buying a stripper well, the chances are it already has a pump installed, right? So
the savings realized by installing this new equipment would first have to pay out,
wouldn't they? On revenues generated by marginal production? The press releases say
that only low pressure compressors are required, well, let's do the numbers: figure a
column of oil 2000 ft high - the pressure exerted by that oil is about 700 psi, so the
injection gas must reach that pressure at a minimum before it can move the column
upward. Doesn't sound like low pressure to me
Not the rosy picture painted, maybe, but not all doom and gloom either - there may be
a good application of the technology, and they may have found one. Time will tell,
keep digging.
As for the Matagorda Island stuff - well, the easy shallow gas in the Gulf of Mexico
has been found long ago. The big transformation in the industry in the last 10 years has
been the advancing sophistication of seismic technology, and the speed at whch seismic
data can be processed. It used to be that seismic information was shot in "lines" which,
when processed, returned a 2-D representation of the formations and structures below
ground, revealing faults and domes, other features of interest, so forth. With the
advances in computing, they can now shoot a grid of lines and process them together,
giving a 3-D representation of a given structure or area. There is now even an
application for this where 3-D is shot over the same grid as a field is produced over
time, highlighting areas of a field which are under-produced because of heterogenieties
in the formation. Bringing time into the picture makes this 4-D seismic, and it is used to
pinpoint future well locations so that a well can be drilled to fully exploit the formation.
Whether or not this play on Matagorda is as a result of seismic advances I don't know.
I would be digging pretty hard to find out why this play has only now come to light. Is
it, for example, a play which has come about largely because of the efforts of a talented
land man who was able to get some acreage together?
Keep me posted and good luck |
