Stripper well

Stripper well
The top ten US stripper well states.

A stripper well or marginal well is an oil or gas well that is nearing the end of its economically useful life. In the United States of America a "stripper" gas well is defined by the Interstate Oil and Gas Compact Commission as one that produces 60,000 cubic feet (1,700 m3) or less of gas per day at its maximum flow rate; the Internal Revenue Service, for tax purposes, uses a threshold of 75,000 cubic feet (2,100 m3) per day. Oil wells are generally classified as stripper wells when they produce ten barrels per day or less for any twelve month period.

Economical importance

In the United States of America, one out of every six barrels of crude oil produced comes from a marginal oil well, and over 85 percent of the total number of U.S. oil wells are now classified as such. There are over 420,000 of these wells in the United States, and together they produce nearly 915,000 barrels (145,500 m3) of oil per day, 18 percent of U.S. production.

Additionally, as of 2006, there are more than 296,000 natural gas stripper wells in the lower 48 states. Together they account for over 1.7 trillion cubic feet (48 km3) of natural gas, or about 9 percent of the natural gas produced in the lower 48 states. Stripper wells are more common in older oil and gas producing regions, most notably in Appalachia, Texas and Oklahoma.

Premature abandonment

Many of these wells are marginally economic and at risk of being prematurely abandoned. When world oil prices were in the low tens in the late 1990s, the oil that flowed from marginal wells often cost more to produce than the price it brought on the market. From 1994 to 2006, approximately 177,000 marginal wells were plugged and abandoned, representing a number equal to 42 percent of all operating wells in 2006, costing the U.S. more than $3.8 billion in lost oil revenue at the EIA 2004 average world oil price.

When marginal wells are prematurely abandoned, significant quantities of oil remain behind. In most instances, the remaining reserves are not easily accessible when oil prices subsequently rise again: when marginal fields are abandoned, the surface infrastructure – the pumps, piping, storage vessels, and other processing equipment – is removed and the lease forfeited. Since much of this equipment was probably installed over many years, replacing it over a short period should oil prices jump upward is enormously cost prohibitive. Oil prices would have to rise beyond their historic highs and remain at elevated levels for many years before there would be sufficient economic justification to bring many marginal fields back into production.

As a result, once a marginal well is abandoned, the oil that remains behind is often effectively lost forever. Estimates are that the marginal wells plugged and abandoned between 1994 and 2003 represented 110 million barrels (17,000,000 m3) of crude oil reserves. Although the situation is less severe for natural gas, as of 2005 there is nonetheless a growing concern about the premature abandonment of gas stripper wells. As of 2006, the United States would have to import an additional 860 million barrels (137,000,000 m3) of oil (this figure must be wrong! it is about 10 times greater than the world's total oil consumption!!) every day (an increase of 7%), and 1.5 trillion cubic feet (42 km3) of natural gas (an increase of 38%) without the aggregate production from its stripper wells.

Sources


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