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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2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on April 13, 2013 at 11:38am

Grand, Jack. Thank you for your concise ICBM, nuclear reactors, & M/U shale well technology explanation...well put.

Permalink Reply by Ed C on March 25, 2013 at 1:29am

It is a far more complicated undertaking than poking a hole in the ground and having money gush out.   The driller simply is the contractor making the hole.   He is aiming for the target YOU provide for him.   A target window maybe 25-50 feet in size but over a mile away through rock .   Can you identify the target for the driller?  If he misses can you prove it was him missing and not his accusation that you provided him with bad data?  And if, while he drills, the samples coming up suggest the window may be shallower or deeper than the target you provide--who makes the call?   I don't know if I as a landowner would want to bet a million or so on my expertise.  I'd rather take 15% cut with zero risk.   Because even assuming my expertise would be perfect, the hole still could come up dry.  (and I doubt my expertise would be anywhere close to perfect)

If you don't like the nuclear power plant analogy, try being your own general contractor when you build your house.  

Permalink Reply by Dan on March 25, 2013 at 7:16am

Ed C,

"If you don't like the nuclear power plant analogy, try being your own general contractor when you build your house."

That was my first thought opening this dicussion.  But on the other hand, a wise group of landowners could hire the services of a respected drilling supervisor (general contractor).  Purchase siesmic and other data.  And most importantly retain the services of a good investment banker to use "other peoples money" to finance through till production.   

I have thought all along that a group of landowners pledging a equal % of bonus and royalties/acre in a region could build their own NG powerplant much easier, just call GE.  It would take several years but should reduce their tax burdens.  Kind of like co-op electric service we have in the country now.

It is sad we all worry about risk so much today.  Some of America has slipped away with the fear of risk.  The more the risk, the more potential gain.  If no one takes a risk there are no losers but no winners either. I would love to see a group of landowners drill their own well.  Everything is subbed out anyway whoever is the "driller".

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on March 26, 2013 at 11:41pm

Boy, Dan - you've got it, you've really got it! It's NOT as 'COMPLICATED' as 'they' TRY to make it seem...you are a business owner of some sort - to know how to quickly put together & come up with a clear, make sense thought towards GETTING THINGS DONE. ***THAT is what 'they' are all AFRAID OF... the DOERS, the THINKERS, the TINKERS, the ***WILDCATTERS!

When it comes to REWARD - there's GOT to be 'risk'...if it wasn't 'risky', then EVERYONE would be 'doing it'. BUT there are those few who DO. You ARE right...it's just 'subbing out' the jobs - parceling them into 'manageable blocks. They 'know-hows' are there...it's just 'putting them all together' in an 'organized fashion' & figuring out WHO get what 'cuts' / paid for WHAT gets accomplished...time is money, too...it would be tough, BUT it WOULD be doable.

Never give up...stay strong. THIS 'WILDCAT' idea has the 'black cat' that they HOLD in 'their bag' QUAKING & SHAKING...but THAT is American ingenuity at it's best. When THAT is gone...then what?

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

As one light lights another, nor grows less - so nobleness enkindles nobleness. I, too, have had this idea...BUT...no 'buts' - the 'house' is built one rock/brick at a time. Gotta' start somewhere...look at all the people who DID try, failed - kept ON 'trying'...then SPINDLETOP happened. Where there's a WILL there's a WAY.... ***RISK = REWARD***...sometimes yes, sometimes no, but THAT is all 'in the making'. THAT is the 'NUT' that needs to be broken. ENDEAVOR.

...SOMEDAY, SOMEONE *WILL*

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on March 29, 2013 at 6:04am

OK - a house I can build...I'll be dealing with TANGIBLE objects to work on & with in creating my 'structure'. That's simple.

Like your suggestion - YES, it IS far more complicated than just 'porking a HOLE in the ground & out flows the gold'...they ARE technologies that enable a well to have better positioning today, hence BETTER OUTCOME.

BUT that IS the risk to take. That's the risk one must take, for sure. There WILL be individuals who WILL endeavor to undertake such a challenging task. Some will fail, but SOME will succeed.

IF it were 'that easy', then EVERYONE WOULD be 'doing it'...but it's not - but THAT doesn't mean it's 'not possible', just TOUGHER, right? I'll stay away from the Nuclear Power Plant stuff...THAT I don't want anything to do with because it IS too complicated. but this? - it IS 'tackle-able'!!

SOMEDAY, SOMEONE...WILL....

Permalink Reply by Frank Walker on March 25, 2013 at 1:36am

Personal circumstances proscribe my going into detail or providing additional information.  Suffice it to say, based on my experience, the principal value of self-development lies in the threat it poses to your gasco.

Permalink Reply by Jack Straw on March 25, 2013 at 5:01am

When people see a rig on a well site, they seem to think that the drilling of that well is simply the work of those people present at that well site.

When people see a rig on a well site, they seem to think that the technology involved is simply mechanical.

The reality is that the majority of the people who are associated with the drilling of that well will likely never set foot upon the well site.

The majority of the people who are associated with the siting and drilling of that well are sitting in offices and labs spread around the country. Many sitting behind computer workstations, others behind binocular microscopes or gas chromatographs.

When people see a rig on a well site, they are seeing the fruition of the work of many disciplines, including engineers and scientists beavering away at locations quite remote from the well site.

 

All IMHO,

                  JS

 

 

 

Permalink Reply by melissa humphrey on March 25, 2013 at 5:23am

Yes, many groups and some individuals have considered drilling their own well.

IN PA a 6 ft lateral costs about 6 MM to D&C. If bad luck hits and it is dry, it is just a write off.

2, with the Uitca and Marcellus palys so hot and top talent scarce you might end up like the outfit out of Canada, a pennystock, whose 1st horizontal had flow of 450,ooo cf/d to start before the decline hit. They got a bargain price for thee drilling and completion, using a Butler PA based shallow driller. Those are the rigs similar to a water well drilling rig.

3. yes rigs are available, gas rig count is 450, vs 1400 in 2008, many are freed up and price per day is down.

If that sounds good to you, commence,  don't let big oil take what is yours!! 

Permalink Reply by Mike Filer on March 25, 2013 at 7:11am

I'll throw in my 90 acres

Permalink Reply by Mark Allen on March 26, 2013 at 4:38am

what about doing something outside of the box, close to this idea....do a 50/50 venture with your operator..no upfront bonus consideration.  All money goes into exploration and development.  In the end, mineral owner ends up with more of what is actually his.

Permalink Reply by New Field Farm on March 29, 2013 at 5:18am

Mark,

I agree, with upfront costs beyond a typical landowner's reach, partnering is the next best option.  Yes, I would forego the upfront bonus for higher payout upon production.

Permalink Reply by gillian barber on March 26, 2013 at 4:53am

Great question!  Check out Allegany Energy in Allegany County, NY  http://www.alleganyenergy.org/default.html    And, here's the article...  http://www.wellsvilledaily.com/news/x1081603892/Oil-drilling-Breaki...

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