PRODUCING OIL WELLS

Price cut slows comeback

While positive numbers from a few areas kept the decline to a minimal 0.6%, or 3,058 wells last year, from 2000, producing U.S. oil wells did not fully recover from the 12,000-well loss in 2000. The category that fluctuates the most with price is stripper wells. Those states with large numbers of low-volume wells have seen many shut-ins. Notable losses are recorded in Illinois, Northeast Texas and West Virginia. In the latter case, the state agency reported a record low number of 8,450 wells, down 7,450 from typical numbers.

Areas that have active extra recovery projects underway, such as CO₂ flooding, held up relatively well. Examples are Southeast New Mexico and, particularly, Texas District 8, in which the Railroad Commission reported a near-6,000-well increase. A strong early-year drilling program in District 1 also boosted well numbers by over 1,300 wells.

Elsewhere, there were gains and losses, depending on how long the drilling surge lasted. Example states with large numbers of oil wells include: California, a 1.1% jump to 43,078; Kansas, down 2.6% to 42,350; Kentucky, about level at 29,557; Louisiana (North) down 1.9% to 21,225; Ohio, steady at 29,087; Oklahoma, down slightly to 84,252; Pennsylvania, up 11.3% to 16,750; Wyoming, up 5.3% to 10,160; and Texas, an overall 3.3% rise to 159,240.

It’s easy to turn off a 5 to 10-bopd stripper when $18 oil is not paying maintenance costs. Adding new wells by drilling / development is not as easy. Increasing oil demand later this year should reverse some of these limiting factors.