The Vital Role of Stripper Wells in the U.S.

For decades, a stripper well or marginal well has been understood to be an oil or gas well that is nearing the end of its economically useful life. "Stripper well" or "marginal well" are terms generally used to describe wells that produce natural gas or oil at very low rates—less than 10 barrels per day of oil or less than 60 thousand cubic feet per day of gas.

With the price of crude oil spiraling upward and the peak oil apex imminent, an interest in reclaiming untapped reserves in these stripper wells is becoming a topic of renewed interest, and the subject of the documentary video, "Independent Oil: Rediscovering America's Forgotten Wells," which was awarded a bronze award at the 28th Annual Telly Awards for 2007.

In the United States of America, one out of every six barrels of crude oil produced comes from a marginal oil well, and over 78 percent of the total number of U.S. oil wells are now classified as such. There are over 400,000 of these wells in the United States, and together they produce nearly 900 thousand barrels of oil per day, 15 percent of U.S. production.
 
Are Some Stripper Oil Wells Being Abandoned Prematurely?

In the late 1990s, when world oil prices hovered above $10 per barrel, oil produced by many marginal wells cost more to produce than the price it brought on the open market. Between 1994 and 2003, approximately 142,000 marginal wells were plugged and abandoned. The resultant loss in oil revenue is significant: more than $3.0 billion in lost oil revenue at the 2003 average world oil price.

When marginal wells are abandoned, significant quantities of oil remain behind-- sometimes as much as 1/2 to 2/3 of the total oil. In many 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 prohibitve. Oil prices would have to rise several times higher than their historic highs and stay 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 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 860,000 barrels of oil every day (an increase of 7%), and 1.5 trillion cubic feet of natural gas (an increase of 38%) without the aggregate production from its stripper wells.

Now in 2008, oil prices have closed aboove $100 for the first time. Less stripper wells are candidates for abandonment. And what if some of these wells could actually increase production, and access previously inaccessible reserves? Though it sounds too good to be true, this is an emerging possibility. Visit Global Oil Flow and see.
 
Natural Gas Stripper Wells

There is a growing concern about the premature abandonment of gas stripper wells. Currently, there are nearly 296,000 natural gas stripper wells in the lower 48 states. Together they account for over 1.7 trillion cubic feet of natural gas production annually, or nearly 9 percent of the natural gas produced in the lower 48 states. (A "stripper" gas well is defined by the Interstate Oil and Gas Compact Commission, which represents the governors of oil and natural gas producing states, as one that produces 60 thousand cubic feet or less of gas per day; the Internal Revenue Service, for tax purposes, uses a threshold of 75 thousand cubic feet per day.)

Top ten US gas stripper well states
As of 2005, there are more than 260,000 natural gas stripper wells in the lower 48 states. Together they account for over 1.4 trillion cubic feet of natural gas, or about 7 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.

New technologies are emerging to extend the life of gas stripper wells that also produce oil. Not only that, much of the previously unavailable reserves may become accessible through this new walking beam compressor technology.