Restoring a well to a productive state can be accomplished by various clean up procedures such as an acid job, replacing rusted or corroded pipe, repairing a pumping unit, reconditioning various parts and equipment and sometimes, even simply hooking up an electric meter can prove successful. Rebuilding roads and access points are other considerations. Initiating a routing maintenance program is ideal here.
With new technology and enhanced recovery procedures, it is possible to take a well with very low production and increase the daily oil output. Free flowing wells with little to no production can have a pump installed which creates an artificial lift to bring the fluid to the surface. Adding additional surface equipment, such as a compressor or an oil & water separator could contribute to an increased production.
In our Re-completion process, we look for and identify additional potentially productive reservoirs from within the same well bore. By utilizing the existing well bore, we are essentially able to lower our exploration costs and perforate in additional zones of existing wells at different depths. This process consists mainly of creating small hole in the existing casing at the depth of the identified reservoir which provides a path for the oil to flow. This process may be repeated several times for each existing well, dependent upon identified potentially productive reservoirs.
Once a well has reached its full economic potential for oil and natural gas production, an existing well can often be converted into other revenue generating operations. Most common, would be to convert the well into an injection system where water, gas, air or CO2 as a means to increase the bottom hole pressure. Depending on the conditions, these recovery methods can recover between 30 to 50%. An additional injections system could be implemented, whereas the existing well could act as a waste disposal facility for the injection of waste fluid, either as a part of additional lease wells or as a commercial disposal facility.
In the event revenue generations are unable to resume through secondary recovery methods; equipment of value remaining may be recycled to either use on other existing wells or even sold to a recycling facility. To generate additional revenue, surface equipment with a remaining economic life such as a pump jack, separator or tank batteries may be refurbished and resold within the oil industry . Downhole equipment, such as old pipe may be sold or recycled to use as fencing materials, and metals may be melted down.
Using modern technology, surface and sub-surface geology along with well records and area history, our geologists research and evaluate any remaining lease land for the potential productivity of additional wells to be drilled. This process, together with a drilling plan, implements what is known in the industry as a drilling prospect. These prospects may be sold to industry partners, farmed out, or drilled in house. Many independent oil operators purchase drilling prospects due to their convenience.
Developing a drilling prospect opens up the opportunity for a new well to be drilled. In addition to operating a new well in-house, opportunities exist to partner with other oil companies in the drilling, testing and if successful, completion of a new well. These partnerships may serve to reduce the initial outlay in regards to the cost to drill a well in addition to opening up opportunities to drill multiple wells. By partnering with other industry professionals.
The final process involves disposition, or the sale of assets and related leasehold and equipment interests. This may be a sale of a portion of the project or the entire project itself. While disposing of this interest, it may still be possible to retain a financial interest in the project and to continue receiving revenue even after the sale through what is know as a carried interest or back end payout.