Educated Guess oil well success still unclear
Date posted: April 16, 2014
SHERIDAN — A horizontal oil well drilled approximately nine miles outside of Sheridan on Highway 14 toward Ucross has produced a cumulative 1,468 barrels of oil between October and February. According to production records available on the Wyoming Oil and Gas Conservation Commission website, the well’s most productive days of operation were its first two.
One day of production in October yielded 213 barrels of oil, and another day in November, 130. In December, crews worked at the site 16 days to get another 402 barrels. Every day in January and February yielded 457 and 266 barrels, respectively.
The horizontal well, named Educated Guess 11-1H, is 10,565-feet deep and extends outward roughly one mile. It was drilled by a Texas-based company called Onshore Holdings LLC, a subsidiary of Statoil, a larger, international corporation.
Some data and well information, including drilling reports, sample descriptions, drill stem test results and reservoir pressure data is still considered confidential. Because of industry competition, horizontal wells that are drilled on unexplored land with no other wells within a mile of its area of operation can apply for confidentiality for a six-month period.
Afterward, an extension of confidential status may be considered by the state’s oil and gas supervisor.
Powder River Basin Resource Council Spokesperson Shannon Anderson said 1,400 barrels over the course of five months is low for a well in the PRB. However, she said the lifespan of a well and its productivity are impossible to predict in the first few months of operation.
“An interesting thing with these wells is they have initially high production and then it drops off,” she said.
The Educated Guess well is an unconventional well, meaning it’s tapping into oil harbored in rock formations. Producers use hydraulic fracturing, or “fracking,” to release small pockets of oil to then be collected at the well surface.
In addition to the oil taken from the site near Sheridan, 5,399 barrels of water have been extracted as a byproduct of the production process.
Anderson indicated producers in the PRB often have to adjust their excavation techniques when a well’s production begins to dwindle.
“Sometimes, they have to go back and refrack the wells or tweak production methods to get production back up,” she said.
The well is situated on a section of state land designated for royalties to be paid the the Wyoming Department of Education. Supervising Auditor of Royalty Compliance for the Wyoming Office State Lands and Investments Billie Hunter said to date, the only payment made to her office has been the minimum annual amount of $1280. After establishing the minimum annual amount, the remainder of royalties or refunds owed are dolled out on a monthly schedule.
“Normally, they have to report one month after recieving royalties, and that should have started in November,” Hunter said.
The appearance that the company who owns the primary lease on the land, Bearcat Energy LLC, is behind on royalty payments was discovered when The Sheridan Press called Hunter to inquire about the status of the well.
Hunter agreed the well is not a significant producer at this point, but the well is still a relatively new endeavor when it comes to drilling.
“It could mean they haven’t gotten the right zone yet,” Hunter said. “They could be working through issues on the well.”
Hunter said most wells are most productive in their first few months of operation and then the product yield goes down. However, she said the months after the initial production surge are historically most indicative of potential future production.