Expert: Frederick M. - 11/3/2009

Question
I have mineral rights on some land in McClain County, OK. An oil production company began drilling and they struck oil. Each month the production in the number of barrels has gone up. It began at 60 barrels (May) a day and has increased to 90 barrels per day (August). I'm trying to figure out how to estimate an approximate length of time the one well will continue to produce. I've been searching online for information as to how this type of estimate is generated, assuming an oil production company would not dig in a particular location unless they had enough evidence that it would be worth the financial risk... right? So, how do they figure this out? Is there any information online that explains this? If you can refer me to a website or a textbook to understand this I would be so grateful.
Also, is there a site where you can look at the month's productivity so you cna get an idea as to how well the well is producing. The production company refuses to impart that information. They tell me to wait for the check.
Again, thank you for any advice. I am new to all of this!

Sincerely,
KB

Answer
KB, if you'd shared with me the legal description of where this well is, I probably could have given you a good estimate of its remaining life based on other wells in the area. However, you can go to the Oklahoma Corporation Commission website's database page: http://www.occeweb.com/Orawebapps/OCCOraWebApps.html and search for production by Section, Township, and Range (i.e. 13-6N-18E etc.)yourself and find the same information.

On this website, not only can you look up the production for your current well, but you can also look up the production of other wells in the immediate area that are likely producing from the same reservoir. The site is a bit tricky to navigate, but they're working on it. It IS free however, which is always a plus! www.pangaeadata.com is another good site for Oklahoma, and is much easier to navigate, but is NOT free. www.drillinginfo.com will also let you study the "decline curve" of any well, which would help give you a visual representation of how steeply a well's production is declining (and therefore how much life it may have left.)

Most wells decline by 50% or more in their first year or two but level off after that quite a bit and decline more slowly. This is especially true with gas wells. Oil wells can produce for many decades, or for just a few years; it just depends on the well really. Sometimes older wells are "reworked" and their production improves for a few more years, but this is not always the case. It's generally a matter of economics as to whether a well is reworked or not.

A good book to read on oil wells is "A Primer of Oilwell Drilling" seventh edition. It can be purchased online at http://store.iadc.org/DisplayDetail.aspx?pid=84 The book explains the whole process from start to finish, including some info on how the drillsite is chosen. You can also buy it directly from the publisher at: http://www.utexas.edu/ce/petex/aids/pubs/oilwell-drilling-primer/ It's $95.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
Timbercreek Mineral Company, LLC