Part 2: U.S. Oil and Gas Plays that Work Now for Small Independents and Consultant Teams

Published
American Association of Petroleum Geologists (AAPG)

This brief article is a continuation of "U.S. Oil and Gas Plays that Work Now for the Small Independent or Small Consultant Team (Part I)" which aims to provide sources of information that can be used to develop a list of candidates to acquire, and to target wells and fields that can be revitalized using new technologies and team-based approaches. Some of the areas are potentially a better fit for a medium-sized company with significant access to capital. Some areas are ideal for the small independent or consultant.

Oil was first observed in surface seeps in so-called "oil springs" where the first production was essentially mined from hand-dug trenches as early as 1867. The first significant discoveries of oil and gas occurred in structures near Casper, which quickly became known as the Oil Capital of the Rockies. The first oil refinery was built in 1895.

Unconventional resources (coalbed methane, etc.) have figured prominently in Wyoming's production, as well as shale, esp. oil shale. The potential for EOR using CO2 floods is always high due to the fact that the state produces carbon dioxide in significant quantities. Devon had success with a CO2 flood in its Beaver Creek operation in central Wyoming. It had 18 injection wells and 18 production wells, and the goal was to ultimately recover 12 million barrels of oil. With an initial investment of $100 million, the project will have at least a 3:1 ROI, even at $30 per barrel.

The Salt Creek field, first drilled in 1908, is like many old fields. Although it has undergone secondary recovery (waterfloods) and preliminary CO2 flooding, its new owner, Fleur de Lis Energy, is confident that they can achieve a 35% recovery factor, even though many CO2 floods can achieve a 50% recovery factor. According to reservoir engineering reports, only a third of the oil has been recovered from Salt Creek, and 1.8 billion barrels are still in place.

Wyoming has many smaller fields, all of which still have significant reserves that have not yet been recovered, and which can now be recovered, using new CO2 flooding technology.

Wyoming State Geological Survey
http://www.wsgs.wyo.gov/
Wyoming Oil and Gas Conservation Commission Digital Data
http://wogcc.state.wy.us/
Wyoming's Oil and Gas Resources Summary Report
http://sales.wsgs.wyo.gov/wyomings-oil-and-gas-resources-summary-report/
Oil and Gas Fields Map of the Power River Basin, Wyoming
http://sales.wsgs.wyo.gov/oil-and-gas-fields-map-of-the-powder-river-basin-wyoming/
Carbon Dioxide (CO2) Map of Wyoming
http://sales.wsgs.wyo.gov/carbon-dioxide-co2-map-of-wyoming/
North Dakota

We often think only of the Bakken and the Three Forks, but North Dakota has been an oil producing state for a long time, first in the Williston Basin. North Dakota has very clear guidelines for temporarily abandoning wells, and so, looking up the temporarily abandoned wells could be a good place to start if one would like to acquire distressed property that is in good shape. As opposed to some states, North Dakota requires operators to inspect their wells each year under TA for mechanical integrity.

For more information about North Dakota and Louisiana continue reading...

Conclusion(s)

The use of innovative technologies such as new CO2 floods, new nano-surfactants, integrated techniques that help identify sweet spots and bypassed pay, and other new approaches will continue to revolutionize the industry. Now, there is also a renewed focus on revitalization and optimization of existing reservoirs. While some opportunities are to be had by taking advantage of a distressed company's need to liquidate assets, that route can be complicated by liquidity issues, bankruptcy courts, and delays.

Let's start putting some of the concepts into practice, and start to build our own business opportunities.
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