Have any groups considered drilling your own well?

Accepting the risk of sounding completely green or ignorant, I just have to ponder why no one has decided to  pool together and hire a driller for fee.  Having observed payouts of $90K per month and doing the simple math, a small group of landowners should be able to contract a driller.  I don't know the cost of drilling and fracking but have heard it is in the neighborhood of a 1/2 to 3/4 $million.  Another in the industry told me more like 7-8 $million.  I believe the 3/4, not the 8 because I don't see how it would pay back at a cost of 8.  Of course, transmission lines are another factor but what if, a line is close to the properties.

So, am I the un-informed new guy, drilling rigs for hire not available, industry just has it all tied up, too much dreaming......

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Permalink Reply by New Field Farm on March 25, 2013 at 1:29am

-It took over 150 years of constant innovation to get from Drake’s Well to "the horizontal and fracking phase”. It took well more than a century’s research and experimentation.

While certainly ignorant to the drilling industry and perhaps much of the technology behind it, I work directly in the defense industry and our delivery technology also took many years of innovation to get from the V-2 to what we have today and so that being said, I still cannot equate the two.

I would also contribute the 150 years because it doesn't make economic or for that matter, common sense to develop a technology you do not need at the time.  Why drill a mile then horizontal and so on when we have a seemingly endless supply requiring a 1:50 return per energy unit?  Now that prices are up and some, not all those in regulatory positions, recognize the US should perhaps be energy independent it is making more economic sense and so this forces technological innovation as a function of necessity rather then time.

Again, I appreciate the technology and really, the people involved as well as I'm certain the work, especially that performed by the men on the ground is very demanding but I'm still not convinced by the numbers.

So inherent in my discussion is the financial, not the technical question.  I just need to figure out a capitalization rate that supports $10M investment MAYBE (if you're lucky) at $90K per month and run it through an average energy industry investment horizon.  As a side bar, we all see how well that worked for the green energy government investment.

Permalink Reply by Jim Litwinowicz on March 25, 2013 at 12:04pm

Jack; while I appreciate that horizontal drilling/fracking is way more complicated then any of us laymen understand, I have to say that a Nuke power plant is way more complicated yet.  Have you ever studied a blueprint of a nuke plant? I have and its unbelievably complicated. So many safety systems, all with triple redundancies. The electronics are down right scary. The chemistry of the primary coolant system as nukes age and the system builds up zoomies. Pretty wild stuff.

Permalink Reply by Jack Straw on March 25, 2013 at 2:17pm

The average age of the US Nuclear Power Plant is 32 years old, meaning that it was built to designs that are more than 40 years old. There has been no new groundbreaking of a nuclear plant in the United States since 1974.

This is old technology; essentially obsolete. You get enough fissionable material together and you have a chain reaction. The challenge is to control and moderate that chain reaction. Really not that much science in our current old reactors, just a lot engineering. Yes the designs are complicated, a lot of interconnected plumbing, valves and controls; but complicated does not equate with technologically advanced.

 

RE: "So many safety systems, all with triple redundancies"

That is just a lot of plumbing and engineering. A lot of valves, relays and controls. Much of these old nuclear plants are massive electro-mechanical devices. Kind of like a cross between a pin-ball machine and a modern city septic treatment plant. All controlled by primitive 1960's and 1970's (mid 20th century) computer technology. The laptop that I am typing on probably has more computational power that the simple transistor based hardware running a 40 year old nuclear power plant.

Those rigs drilling and resultant wells are rife with redundant safety systems, from the multiple redundancies built into the Blow Out Preventer stack to the triple redundancy in casing and cementing (mandated by law). The statement "So many safety systems, all with triple redundancies" can apply equally to the equipment in a nuclear power plant and the equipment associated with the drilling, facing and completion of a horizontal Marcellus/Utica well; a difference being the horizontal Marcellus/Utica well benefits from much more advanced technology with respect to controls and valves and remote monitoring.

A similarity shared by deep drilling and nuclear has to do with metallurgy; due to high temperatures, high pressures and corrosive chemicals ... both use very specific and sophisticated tubular goods, valves, etc. .... both require and use sophisticated monitoring sensors and equipment. The difference is in that rigs and the ancillary equipment associated with the Marcellus/Utica wells are up to 21st century technological standards and not the more primitive mid-20th century technology still utilized by the aged domestic nuclear power plants.

 

RE: "The electronics are down right scary."

Of that I have no doubt, all those old mechanical relays, valves, primitive electrical devices and controls with thousands of miles of old wiring ... all designed and built close to half a century ago ... scares the heck out of me.

 

RE: "The chemistry of the primary coolant system as nukes age"

Which means old. The chemistry of the nuclear coolant system would be largely inorganic chemistry. The chemistry involved with the O & G industry is both inorganic chemistry and organic chemistry; organic chemistry is a bitch, trumps the simplicity of inorganic chemistry. Drilling fluids, fracing fluids, coolants used in the various aspects associated with the Marcellus/Utica trump the coolants used in aged nuclear power plants.

Doubtless the O&G Industry learned and benefitted from the knowledge gained by the nuclear power industry in metallurgy, controls, valves, etc ... but has built upon and grown beyond that technology.

The number of scientific and engineering disciplines currently associated with the O&G industry is a significant multiple of those that were used (many years ago) when the obsolete U.S. nuclear power plants were built.

 

Horizontal drilling/fracing (and what it takes to get to that stage of the process) is way more complicated than any laymen understands.

 

All IMHO,

                    JS

 

 

015334grltd9mPermalink Reply by 015334grltd9m on March 25, 2013 at 2:34pm

Mr. Straw,

You made me realize how old I am, I am a veteran of the 40 year old nuclear energy industry I guess.  It only seems like yesterday, that ballistic nuclear boats were pullling up to a tender on the cooper river for repairs on their reactors.  It feels like yesterday when I had to get liaison responses from Newport News submarine design to deliver to Electric boat who were building nuclear attack subs.  I know, all of the Poseidon class subs are scrapped now and only tridents remain, still makes me feel old.

Horizontal drilling, high tech, state-of-the-art and the envy of the world...............and yet, we have these fractivist who stand in the way of progress.  

Permalink Reply by Jim Litwinowicz on March 26, 2013 at 2:39am

Jack; you have attempted to redefine the argument:.

RE: Before undertaking something as complicated as drilling and completing a long offset deep horizontal well with multi-stage frac ... I would suggest that you start out with a simple project, perhaps a nuclear power plant

You said drilling a horizontal well is more complicated than building a nuke plant and made no reference to which is more technologically advanced.  Obviously a modern horizontal well uses more modern technology than a 40 yr old nuke plant. But a nuke plant is way more complicated.

Further, to compare having three layers of steel and concrete to building triplicate cooling systems, control systems, power systems, containments, and more is pretty weak.

All that aside, for a landowner or a land owner group to attempt to drill their own wells would be very challenging and very risky. For many of the reasons you, I, and others have stated it would be an unwise undertaking even if they were hire an industry-experienced contractor to over see the project.

I would love to see a couple of groups do so successfully as it would have a dramatic affect on the industry.  But the chances of one being successful are very slim, IMO.

Permalink Reply by Jack Straw on March 26, 2013 at 5:23am

RE: "You said drilling a horizontal well is more complicated than building a nuke plant and made no reference to which is more technologically advanced."

You are correct, I will restate to better reflect what I intended:

Before undertaking something as technologically complicated as the project of drilling and completing a long offset deep horizontal well with multi-stage frac ... I would suggest that you start out with a technologically simpler project, perhaps a nuclear power plant.

 

JS

Permalink Reply by Jim Litwinowicz on March 27, 2013 at 3:04am

Horizontal wells are more "cutting edge," more "pushing the envelope," more "advanced science" but nukes are more "technologically complicated." Sorry but thats the just the way it is.

Still I would love to see a couple of landowners with deep pockets pull it off. That would be a game changer and force the E & Ps to pay better bonuses and royalties, maybe work with landowners as a LV partner.

IIRC, there was a high school in Ft Worth that did jut that.  They drilled their own well.  Then they put in a gas turbine electrical generator. They make their own electricity, power the school with it, and sell the excess to the local power company. And they sell nat gas so they are making money on both ends.  Pretty smart.

I know a guy in  Mercer Co that wants to drill his own vertical well and put in a generator to do the same thing.  But drilling a HVHF well is a different animal.

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on March 26, 2013 at 11:26pm

ENDEAVOR! Go forth! Charge!!!

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on March 26, 2013 at 11:22pm

Ye know, Jack...you DO have a point. VERY poignant indeed...you are throwing out 'numbers & dates' like it's all 'old hat' / 'old news'...and I must commend you - you ARE 'saying' FAR MORE that you 'tend' to throw 'brain bones' out for individuals to chomp on.... You 'concemn' the technology that was once - cutting edge' as NOW being 'ancient, backwards - 'behind the times'. You BELITTLE that time's CUTTING EDGE TECHNOLOGY & and THEN you 'go on' to 'GLORIFY' - TODAY'S 'complicated endeavors' as TOO hard for ANYONE to 'understand'...

...*WELL, **WELL, ***WELL...go on & please explain it for all of us simpletons out there so we can understand (as I'm sure YOU do...)...like I said - 'they - the wolves' will HUFF, and they'll PUFF...& they'll BLOW on your HOUSE!...he doesn't usually 'talk' so much....

YEP - us 'hilljacks' understand that's is WAY MORE than it's CRACKED/FRACKED UP to be - you've made THAT quite clear...without REALLY saying a 'whole lotta' of nuttin'...puddin' cakes.  ...just 'squirrels' trying to 'get their nuts', I'd say....

=======================

...again - smoke n' mirrors...a whole lotta' nothin' & he's in 'the group' of people IN the industry TRYING to do their darndest to KEEP the LID on things - it's a PRESSURE COOKER! 

***Technology IS Technology...'cutting edge' for it's time...and THEN things change, they improve. One man BUILDS on another man's SHOULDERS (meaning this - this gets done, then THIS idea gets born & THAT changes...leads to this, then that...and TOMORROW it ALL 'begins anew'!

*Apple (now THAT company REALLY 'morphed'!)

*CONNECTIONS - James Burke...now THERE is a great series that will educate you on the most wonderful technological developments of ALL TIME (and HOW they all 'CONNECT' - one way or another - TO another...how IDEAS evolve!!!

...you were saying, Jack? As one light lights another, nor grows less - so nobleness enkindles nobleness. Carry the Torch - ENDEAVOR! YOU are JG! BE an AmeriCAN (because you CAN!!! - where there's a WiLL, there's a WAY!). Strike while the iron is hot!

Permalink Reply by Jim Litwinowicz on March 27, 2013 at 2:47am

"Connections" with Mr Murke was one of the best programs ever on TV

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on March 29, 2013 at 5:53am

You know, Jack - you mention 'inorganic' AND 'organic' chemistry...I don't know how the WATER EVAPORATION 'element' side of things has REALLY been addressed as of yet. Interesting....

There is 'fresh, clean water' BROUGHT IN, then MIXED UP with a 'chemical solution' (I know, I know - Halliburton loophole, thus we shall 'not go'...that door is closed to the 'common, poisoned Joe...). 

The 'poison water mix' is 'flushed down the tubes'. Does it's 'dirty work', then get pressurized back up vie what has been RELEASED.... In the meantime - time to 'clean the water' & 'contain it' (the 'bad', but it won;t hurt you...).

*CONTAINED WATER evaporates...that BLACK LINER sure HEATS UP! Helping to exacerbate the EVAPORATION. Everyone is concerned with 'run-off' due to rain + with those 'tubs'...but what about the evaporation? - it's not just water....

...AND the 'water forced down the hole'...THAT is this contained underground, so THAT can't 'evaporate'...but these FRACTURE LINES that get opened up - that's how the gas & 'various products' get released, isn't it?...well, if the 'gas' gets out' - where is the residual water/chemicals? They are STILL in the ground. What gois up must come down, and comes back up SOMETIME again...right? This is such an awkward matter to understand - that's why we need you & others like you to explain it LAYMAN'S TERMS so that 'WE' CAN 'understand'. We're not in Rome, anymore, are we?

Please bring a bit more detailed clarity so we CAN understand, we WANT to understand...WILL be 'understood' once it gets explained correctly. It's NOT 'rocket science'!

*Ground position is decided

*pad poured, ready, set, go...

*water, mix - flush...

* dirty, skunky water back out - gas/oil out - we got what we came here for...

*get rid of dirty water, make a 'pond' of it (contain it...black attracts heat, white breaks down too quick - water evaporates, residual residue...) HEY - what exactly happens with that 'pond scum liner' - with all of that RESIDUE on it???

---------------------------------------------------

OK, we're just waiting for better insights from yourself, thank you so very much...

Permalink Reply by john setlock on March 26, 2013 at 5:12am

I believe you are the ignorant one.

 A little knowledge is dangerous. Although I can assure you, that i do not claim to know everything, I CAN  assure you that your claims have NO validity. So please do not act like you are above someone else's intelligence with a sny comment such as "you are forgiven for your Ignorance".

-NASA engineer for 26yrs now.

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