Which oil company drills the best well?

I would like to hear opinions about which oil company drills the best well. Please give specific reasons for your choice and any firsthand experiences you have had.

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Permalink Reply by Jim Litwinowicz on March 17, 2012 at 10:12am

While knowing who does the best job is good to know, that doesn't ensure a quality job wil be done on your parcel(s). First, these companies assign/trade leases with each other like boys trade baseball cards.  Signing with a good company doesn't mean a lot when your parcel gets swapped with a company that isn't so good.

Plus, you never know which company the work will be subbed out to, which super/foreman will be on your site, which crew is assigned to the job. I am sure there are variations from site to site, crew to crew, sub to sub. Even the same crew, same company will have different quality work at times, especially when they encounter new obstacles in new formations and locations.

Permalink Reply by oildude on March 17, 2012 at 1:26pm

Thanks for all the information. So I guess a landowner should just concentrate on the bonus price and royalty % as long as the terms of the lease are agreeable? Just hope and pray that any well drilled is a good one? 

Permalink Reply by Jim Litwinowicz on March 17, 2012 at 1:42pm

Thats why a solid lease is so important.  One of the things most overlooked is the "hold harmless" clause. They usually state the company will hold you harmless for any thing that goes wrong. But that doesn't mean that others will not come after you should an accident occur.  Lawyers practice shotgun law....that is they will sue every single person and entity involved, including the landowner and let the courts decide who to blame.  That can lead to huge legal bills.

What you need is for the company to indemnify you, meaning they will also be obligated to protect you from any lawsuit arising from their operations, including paying all your legal bills.  Best if the lease calls for them to name you as an additional insured on their liability insurance.

Permalink Reply by Jim Litwinowicz on March 17, 2012 at 3:52pm

Why do you not go after the other people that post here that also charge a percentage of the royalty?

Permalink Reply by David Perotto on March 17, 2012 at 6:16pm

Gale,

Why dont you leave Jim alone. One, this is America he can charge any price he wants & consumers dont have to hire him. Two, maybe his fee is worth it. If he gets you a deal  that nets an amount greater than someone would make without him, he has done his job. His fee is none of your concern. I personally have no knowledge of his services, but am tired of you harassing him on this board.

Dave

Permalink Reply by David Perotto on March 17, 2012 at 11:33pm
I never called you any names, look in the mirror. Btw I am a funeral director and landowner.
Permalink Reply by oildude on March 18, 2012 at 1:56am

Can we return to the discussion question please?

Permalink Reply by David Perotto on March 18, 2012 at 5:05am
All done conversing with you
Permalink Reply by Brian Powers on March 19, 2012 at 6:32am

Jim -

The operator who pays the bills has tremendous say over which crews, what equipment/ techniques, etc. are utilized during all phases of well construction. During the final 10 years of my career, my teammates and I did considerable benchmarking evaluation for every well drilled and completed. We feretted out the good, the bad and the ugly and  communicated best practices and lessons learned with our sister operating units around the world. We also had a peer review system that involved experts from around the world looking over your plan and offering improvements. In short, we wanted to continue doing things that went well, avoid repeating huge mistakes, and to continuously improve from one well to the next . Our completions averaged one million dollars per day whether the work being performed was productive or not.

 

The benchmarking and investigative process also created leverage for negotiations of service costs if thing went very horribly wrong.

 

To assume that all ancillary services are sub contracted by the drilling contractor is incorrect. Most O&G operators hold a firm hand over all services, not many wells are drilled "turn-key" anymore as they were in the '70's or '80's.

 

Permalink Reply by Jim Litwinowicz on March 19, 2012 at 8:37am

Brian, thanks for your response.  I didn't mean to imply that O & G companies had little control over the outcome. I am sure they do everything in their power to ensure the best well possible each and very time, especially since they invest 6 to 10 million per well. Add in the potential for huge profits and they have added incentive to do their very best.

My point, not clearly made, was that trying to find the company that does the best job and signing with them, while increasing your odds, does not ensure the best outcome. They may assign the lease to others and there are variations from well to well, formation to formation. This is probably  especially true in a new play like the Utica.

It is good to hear how they maintain quality control and share new knowledge. I am sure these processes are much more complex than any of us on the outside can comprehend. Would be a blast to sit and observe the whole process from start to finish.....along with someone to explain it all!

Permalink Reply by Jim Litwinowicz on March 19, 2012 at 12:30pm

Nuttin wrong with gettin dirty. I farmed and worked construction all my life. Not sure about being covered in crude oil though...

I'll check out the show! Thanks

Permalink Reply by Brian Powers on March 22, 2012 at 1:46am

 

DBD-

I've watched Cold Diggers recently. Its the first time I've been back on the drill floor in nearly two years and after a severe stroke. And no helicopter rides were required as they were for the last time I was actually on a drill floor.  My eyes were glued to the equipment and instrumentation; some of the personnel dynamics really made me smile. The noise and hazards were there, though not the smells, and no heavy steel toed boots or excessive stair climbing either.

 

Good communication between the rig crews and town, in addition to anticipating and taking the correct first response to incidents can often lead to good results.

 

Brian

 

Brian

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