Orphan Wells

[James Jang + 8]

Hi, 

I know it's not a perfect method but in your opinion how many years would it take for wells to be considered orphan wells? I wanna say 3, but wanted to hear what other people think.

* Orphan wells: Wells that have been drilled but have not been completed nor are planning to be completed in the future.

 

[NWMan + 89]

I have not heard this term before but if they drill a well and don't complete it or plan to complete it, it is effectively written off as of that date.   There must be some form of casing in the hole otherwise it would be described as abandoned but to bring it on production would require some form of re-drill if it is not completed. 

[Old-Ruffneck + 1,246]

All well drilled are cased as they are drilled. Depending on depth and strata beneath, they may case a well every 3-5 thousand feed as to prevent collapse and lose all that was gained. Been doing it that way well before my ruff-necking days 40 yrs ago. A well in say Andrews, Tx drilled to 12,960 feet we'd set casing twice to three times depending on the location. 

Back in Railroad Commission days, if the well was dry, cemented in usually within 60 days. I am fairly sure same rules apply. 

[Manuel Bracho + 6]

19 hours ago, James Jang said:

Hi, 

I know it's not a perfect method but in your opinion how many years would it take for wells to be considered orphan wells? I wanna say 3, but wanted to hear what other people think.

* Orphan wells: Wells that have been drilled but have not been completed nor are planning to be completed in the future.

 

 

Edited January 9, 2019 by Manuel Bracho

[Manuel Bracho + 6]

Hello James, here in Mexico , for a well that had been drilled and will not be completed , due to severe/unrepairable mechanical damage or long term community issues, these wells are abandoned almost immediately. Assuming the rig is still at the well site. Hope it helps, Cheers.

[James Jang + 8]

@NWMan When operators write off their abandoned (orphan) wells, do they always report them to the state regulators? 

 

Maybe I wasn't clear on what I was referring to as an orphan well. I'm only counting those that were drilled and yet to be completed. Within those, I am calling certain wells as orphan wells if they are not planning to be completed in the future either.

There could be many reasons why operators won't complete these wells. I'm trying to find a reasonable cut-off time period to isolate these orphan wells among the DUC inventory. I'm leaning towards three years for now...

[NWMan + 89]

There is no reason not to complete a well apart from it being crap.  The rig is there and if you don't complete the well then and there you will incur the cost of mobilization back to that location at a later date to complete a well that was not worth completing when you were there in the first place.  You will probably need to drill the reservoir section again.  If the well is not completed and there is no plan to complete it, that is a crap well and they don't want to spend the money to abandon it or they will return with a cheaper rig to abandon it as part of an abandonment campaign.

[James Jang + 8]

@NWMan I have a couple of follow-up questions. First, are you talking about vertical wells, i.e. conventional wells? Unconventional wells require pressure pumpers for completion so your explanation doesn't fit, I think. 

Second, more importantly, how would you explain DUC's? According to your explanation, most wells (at least V wells) should be completed almost immediately. There are a lot of DUC's lying around and the total number has been increasing since 2014 in the US.

Thanks.

[NWMan + 89]

I don't think it matters if the wells are vertical or horizontal.  The completion is what is required to bring that well on production and if this has not been done and there is no plan to do it, then this is a poor well.

DUC - drilled uncompleted - these wells should have a plan to be completed.  Your definition of Orphan was that there was no plan to complete them.

So far my answers have been just technical.  However we are now wandering into the subject of shale oil and the myths.  I don't know if anyone has ever admitted to drilling a crap shale oil well.  They are almost all put on production at a loss or they are DUC.  They are waiting for room in the pipeline or for the price of oil to go up!  

Poor wells should we recognized as poor and written off.  If you want to keep them on the books for 3 years then they should be in a probable or possible category and the cost of mobilization, completion and re-drilling should be allocated to their cost. 

Details of the production test will clearly indicate their profitability and whether they sound be written off or not.

[cbrasher1 + 272]

@NWMan you are correct as much as I know being out here.  DUC wells are wells that will eventually be brought online, as you noted depending on the variables of current price and pipeline restraints.  No One that I know drills a well without planning to bring it online.  I am currently with Oasis leases and all wells are brought online upon drilling side completion.  The smaller companies cannot afford to not have wells online, whereas the bigger companies (Occidental, Shell, etc.) do not have to bring online immediately and I'm sure will be online as the market is ideal to do so....

[NWMan + 89]

What is it like "out there".  Is there a belief that this is a solid industry with a long term future or real concerns over profitability and the future. 

[cbrasher1 + 272]

2 hours ago, NWMan said:

What is it like "out there".  Is there a belief that this is a solid industry with a long term future or real concerns over profitability and the future. 

I am in the service sector in West Texas.  We seem to stay pretty busy, I worked 98 days 16 hrs/day straight (my choice) before I went home for 8.  Have not heard anyone speaking of slowing down but of course there is always that possibility.  So my plan is to catch up and put some aside for a rainy day should it come.  But folks that I have encountered all seem to think this time is different and will sustain for 5 ys, 10 is longest I've heard anyone suggest.

[NWMan + 89]

sounds good, good luck and stay safe

[IrishBrian + 1]

My opinion is that after Citizen Kane the quality took a nosedive.....

[JoMack + 549]

I think most regulatory agencies call wells orphaned wells when an Operator leaves a well unplugged and the Operator cannot be located.

[Dejan Smaic + 15]

A summary of Colorado's orphan well program may help answering your question:

Orphan Well Program Background
For a variety of reasons, oil and gas operators may discontinue operation and maintenance of
oil and gas facilities, effectively “orphaning” the facilities. For example, the COGCC may
have revoked the operator’s right to operate through an enforcement action. Alternatively,
an operator may have also voluntarily stopped operating facilities due to its financial distress.
Finally, in some instances, the COGCC is unable to identify the responsible party for “historic”
oil and gas facilities. The OWP identifies, prioritizes, and addresses these oil and gas wells,
locations, and production facilities statewide, which without intervention may impair a
surface owner’s farming or ranching activity or other use of the property, harm wildlife, or
present a safety hazard to the public.