Exploration of oil and gas… it isn’t what you think it is.

by Upinak on August 14, 2013

Did you know that most oil and gas wells drilled in the world were, and are, done by small independent oil/gas companies?  Yep, ’tis true, no matter what the media or other persons of interest say otherwise.  These small independent companies were called Wild Cat Operations.  They were and still are the leading edge of drilling for that precious oil and gas, which is so highly coveted.  Let me take you back, and give you some history on how and where this first came about in what is “Part 1″ of a 2-part series.

Let me say there have always been seeps of oil, bubbling up from the ground since the time the world was formed.  Oil is mainly dead algae or what geologists and chemists like to say, Lifeless Hydrocarbons, compressed, pressurized and heated which turns into a sludge.  Natural Gas comes from oil that has been compressed and pressurized even more.  When I say pressurized, think of a piece of graphite, when you take it and pressurized it, you get coal, if you pressurize it more, you get a diamond.  Oil and Gas are the same.

Now seeps have been all over the world, and most ancient cultures have used it to make various things and weapons.  But the real start of how the oil boom began in the U.S., was Titusville, Pennsylvania on Oil Creek (which is actually called the Allegheny River now).  People would see a sheen of oil on the tops of the water, and called it Rock Oil.  A man by the name of Edwin Drake, drilled (actually pounded) in the area, which started the flurry of the exploration of oil.

This laid waste to the Oil Boom of Texas.  A man by the name of Anthony F. Lucas, who lead a drilling team, saw the salt dome known as Spindletop.  The area they were in was well known for oil seeps.  When the well has reached down to 1,139 ft, the pressurized gas and oil, launched most of the drilling assembly into the air; gushing oil, gas and water everywhere, which then coined the term of any well that gushed out of the ground a “Gusher”.  This started the Texas Oil Boom.

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The picture above is the spindletop well, which had been “gushing for over 10 days.

 

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These pictures show how much the spindletop area grew and the oil boom took over in Texas.

Now, how does one “explore” for oil and gas.  Well, over 100 years ago, how they would explore was to look for nice round mounds, good sized hills.  Only to then realize that just because there is a hill doesn’t mean there is a pocket of oil and gas under it.  So the geologists began to step in.  These individuals knew what rocks and clay types were on the surface of a nice oil pocket, and 3 out of 5 times, the geologists were right.  Fast forward to today, and times have a changed!

To get the best cost verses waste management, most people who drill for oil use seismic machines that bounce sound waves.  These machines are called thumpers.  Thumpers use these huge paddles, at the end of hydraulic arms and stomp (or thump) the ground for a few minutes, then move to a different position.  The machine then collects the data from the sound waves bouncing back up and it creates an image.  These images can show pockets of oil, gas, water and sometimes nothing.  The nothing can be a cave, a void, and sometimes a large geode.  Back in the 60’s and 70’s, they use to use dynamite for this type of seismic reading.

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This picture is the basic structure of how Thumper Trucks work.

Now, when you have this beautiful picture of zig zag lines, is where the work for drilling begins.  The lines can indicate many things; Water, oil, gas, a cave, and in some cases even special minerals.  With this picture, there are two was to go about exploring the strata of the surface of an area.  Shot Holing or Shot Holes, which is taking a small drill rig and going to a certain depth to see the rock formations in the area.  Or, drilling a well, which can either be a straight hole or hydraulic fracturing, that I had spoken about last week.  A shot hole drill is more expensive, but can be instrumental in finding the right variances in the formations to truly have an oil or gas field.

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This Picture is the prefect example of a seismic graph.  The large red spot in the middle indicates a possibility of oil or gas.

An exploration field is an area where the oil and gas is centered, which can be a few acres to hundreds of square miles. Now, when the drilling companies are in an exploration field, everything is still called speculatory.  This means that even though petroleum geologists and drilling engineers have all this expensive information, it doesn’t mean that there will be any oil or gas of substantial quantity.  When the drillers do drill the first real well in the area, and hit oil or gas in a new exploration field, is called a Discovery Well.  The Discovery Wells are all over the Unites States.  It may be considered a good well, but it also may be plugged right after being drilled, and have well drilled around it as an estimate of where to find oil and gas.  If the field is found to be good, then drilling will continue to extract the oil or gas.  If the field is “spotty”, as in it has some oil or gas, but the oil or gas doesn’t move fast, it can be called stranded and that is when there shall be fracking.  Of course, if the field has brought up multiple dry holes, the field is called a dead field.  This can also happen in fields that are decades old, and seem to “dry up” with no oil or gas going into the wells.  If that happens, the holes are plugged and abandoned (P&A).  There have been a few instances, where a grad student doing work in some type of geological field will go to these old P&A wells for their thesis,  and find oil or gas in them.  This has been happening more and more, with people and drilling companies rechecking or testing old P&Aed wells.

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This is a well map of working wells and proposed sites for exploration.  This is also a field map that shows over 10 oil and gas fields across the North Slope of Alaska.  If you look carefully, you will also notice that there were wells drilled in Alaska National Wildlife Refuge (ANWR).

If the drilling and the oil/gas company want to hold off extracting the precious minerals, they what is known as a Christmas Tree on the well.  These are really a bunch of specialized pipe, fittings and monitoring equipment (gauges that watch the PSI of a well), and can look like from a distance like a shiny Christmas Tree.  These functional pipes and fittings are special made depending on well type.  They can be removed later if there is to be a pipeline running through the area, or if the owner wants to place a holding tank (oil only) on the property, in which they would have a Pump Jack which slowly syphon’s the oil out.

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Christmas Tree

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Pump Jacks in Wyoming.

Oh course these Christmas Trees can be on there for years due to lack of natural gas pipelines, or even oil transferring pipelines to refineries.  With the Key Stone pipeline in a hold pattern and Canada not happy with Obama, most companies are in a holding pattern, going bankrupt or dismantling the business due to the Obama administration effecting small and large businesses alike.

Exploration of any oil and gas has also taken a huge hit in recent year.  Under the Bush administration, any drilling company and oil and gas company or corporation, was able to take a write off concerning exploration, which was put in place with the IRS.  The was called the Oil Exploration Tax Credit and it started in 2004.  The Credit ended December 31, 2012.  Many people may say, “so what” if the tax write off stops because oil and gas companies make billions.  This opinion is notorious is most of the U.S., though when you ask these individuals how much it can cost for exploration drilling, they say they do not care or do not know.  The normal cost for an area, that has easy access with trucks, trade men, and other trade type business in the area of an exploration field, can range from 8 million to 20 million.  This is for one well, and these are usually independent companies.  There will be some individuals who will throw the Discovery show, “Blood and Oil”, saying that they did it for one million dollars.  This family owns their own drilling company, drilled on their own land, and have been doing this for decades, so they know the in’s and out’s, and probably are using the remnants of other wells they have drilled (pipe, casing, casing cement, etc.) from other clients.  When you are in the oil business, and a small company, you don’t throw away perfectly good material.  The Discovery Channel has already been known to give money or help pay for certain items on shows, and ask for the people who are being taped to create drama.  So, that is totally up to the individual on what they believe.

Next week, in Part 2, I will talk about how a well is drilled and what all goes into it.

{ 4 comments… read them below or add one }

Merle August 15, 2013 at 12:26 pm

Having grown up near Drake’s well this is of special interest to me, thanks for posting! Just FYI a lot of locals still call it Oil Creek, old habits die hard!

Reply

upinak August 15, 2013 at 2:07 pm

Sorry Merle, I was going along with what they call it now. :)

I took a class on the history of oil from UAF (Uni of Alaska Fairbanks) and man was it GOOD!

Reply

Kevin August 15, 2013 at 1:06 pm

Worked for years in the petroleum industry but on the refined-products/shipping/storage side of the biz. Looking forward to the next installment!

Reply

upinak August 15, 2013 at 2:09 pm

Kevin, isn’t the oil/gas industry fun! You can learn all sorts of things even if you work in it because no matter how much you work in that industry, you can always learn something new.

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