BP To Drill 10 Appraisal Wells in Trumbull in 2013
BP announced 12/17 that beginning in April 2013, they will drill the first of 10 "appraisal" wells in Trumbull County. They say if the results are positive, more will be drilled ASAP to get as much of their leased acreage HBP as possible. 10 wells in one year is a LOT of activity! They talked about pipeline infrastructure, midstream processing capability being built, the whole shebang. So from a landowners perspective, what does this mean? The appraisal wells will probably not produce much if anything. Can they be enlarged to producing wells? If you get unitized for a appraisal well, are you shut out of royalties because your well isn't a producer? This thing has all the makings of a big roll of the dice, largely a matter of luck. Doesn't look like many will see their signing bonus a second time at the end of the primary term. You will either be HBP by then, or your land found to be unproductive and the lease allowed to run out.
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Replies to This Discussion
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Permalink Reply by myles fetterhoff on
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Where are proposed locations
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Permalink Reply by Craig Stull on
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Myles, All 10 wells they are drilling next year will be east of mosqito lake. No wells will be drilled to the west of the lake next year!!!
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Permalink Reply by D M on
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Craig, do you know the reasoning behind that decision? Are they more confident of good results in eastern Trumbull, or are they less confident and trying to prove the eastern area? Needless to say I hope all of Trumbull county proves to be excellent. Also, does any one know what specific types of gas and oil are hoped for in our county? I suppose all will be proven in time, but it is fun to speculate.
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Permalink Reply by Craig Stull on
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D M, This is what was put out in the Youngstown Business Journal the other day. Not sure why but if I had to speculate the proposed pipeline will be going up route 11 and this just happens to be in the eastern half of the county.
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Permalink Reply by Tim Tarr on
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Thats the way the Big Boys play. Very small part (pocket change) of their drilling budget. If results look good It will be a flurry of lease buying (watch for recordings in recorder of deeds) or buyouts before any results become public knowledge. This is where the most money is made by smaller companies.Then HBP drilling which will still be pocket change to them.
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Permalink Reply by Jim Litwinowicz on
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What do they mean by "appraisal wells?" Is that a straight vertical well only? Will they frac the wells? Or will they do horizontals? I am sure they will pull lots of core samples. Just never heard the term appraisal wells.
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Permalink Reply by MJ on
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Jim
I have learned a great deal from you and fang and others on this site and wish to thank you all. I also would like to know exactly what "appraisal" well means. Would landowners in units with these well be HBP for a long time while infrastructure is developed? It seems like BP is watching, learning and planning from what is going on in counties south of trumbull right now.
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Permalink Reply by Brian Powers on
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Jim -
Appraisal well drilling is common in my experience both for new discoveries or for entry into a new basin or play type. As indicated in your note, BP will likely cut core and will perform extensive wireline logging in the wells. They may also experiment with different mud types and drilling techniques to better determine how to handle the challenges sure to come while developing the play.
They may well drill a horizontal leg or two and it would not surprise me if they frac and test one or more of the wells, again, in an effort to provide the planning teams with better information that will allow a more efficient plan to be developed. Teams armed with at least some pre-planning data tend to make better plans and spend money more efficiently than teams who plan and learn on the fly. I've been on both ends of this spectrum and have been on the receiving end of a few "red-faced" conversations when things go south.
Brian
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Permalink Reply by farmgas on
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From my layman knowledge of the O&G Industry, it appears that these companies subcontract to independent well drilling firms, and don`t have their own drilling capability. Don`t the drilling companies provide insights, knowledge, etc., from their own experience in the region to advance successful prospects. Or are the drilling outfits just hired and directed to do what the O&G companies want?
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farmgas -
I learned during an earlier exchange on this forum that their are a few companies out there who still operate their own rigs. My first employer, Amoco, sold off all company owned rigs in the 1950's; during my entire 30 year career with Amoco and then BP, we subcontracted all drilling, well construction and well completion services, along with drilling fluids,logging and data collection, tubular handling, cementing, logistics services, etc.
Extensive planning sessions are held before, during, and after drilling/completion operations. We attempted to engage the "bigger brain" to leverage key lessons learned, best practices, etc. from their operations in the region and elsewhere, usually with mixed results. BP had an extensive Peer Review process for new and innovative operations that utilized subject matter experts from partners, service providers and elsewhere around the globe if another BP business had attempted to perform a similar operation. We also had internal web-based technical forums where ideas and solicitations for advice could be made.
Most of the sub contractors talked a big game when it came to capturing lessons learned and exchanging best practices globally, but it usually fell to a small team or individuals who demonstration a passion for doing things "right the first time"
A senior manager who I worked for in my last job said that there are "no oilfield mysteriesand no new problems in the oilfield," Most every problem out there has been experienced by someone, somewhere, the challange was finding out where and who to contact about the problem
Brian
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Permalink Reply by farmgas on
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Brian--thanks for your reply. What keeps a drilling company from sharing confidential or proprietery information amonst the various O&G companies they work with? Just asking...what separates one drilling company from the next? Experience, expertise, rig capability....here in Pennsylvania I see where any O&G company will use several different drilling companies, but tend to use just a few for their drilling needs. Is it more cost & availability driven once they qualify who can meet their drilling needs? Thanks,
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farmgas-
Most drilling/well services contracts that I've seen contain confidentiality agreement language designed to prevent the spread of company or Intellectual property secrets among the operators.
Having said that, though, there are few secrets in the business. Years ago, operators used to hire "scouts," whose role it was to keep abreast of activity in the region, usually for competitive leasing purposes. These days, somone with an attentive and well cocked ear in a coffee shop or tavern may pick up snippets of useful information; I've often wondered how many prying eyes looked over my shoulders on airplanes as I reviewed company information en route to meetings.
There is also an abundance of technical information in the public domain or for sale (SPE papers, etc.) that can help inform about insights or advances in a particular play. I have no direct experience in the Marcellus play, but I imagine that it is relatively simple land drilling with a few regional specific challenges.
Rig cost/availabilty certainly factor into rig contract awards, as does safety/environmental record, local content (use of locally available help/talent), community support, etc. Its a much broader spectrum conversation than who can get on the well pad soonest???.
Finally, it is worth remembering the difference between a fairy tale and an oilfield tale: The fairy tale begins: "Once upon a time...," wheras the oil field tale starts: "Now, this ain't no BS, but..."
Brian
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