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2112Petroleum Question

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  • Roxanne Boyer
    Jul 29, 2003
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      HREG,
       
      I've been looking up information about oil and gas wells and I think I found some information, but I don't know the reliability of the sources.  I would appreciate it if anyone knowledgable in the subject could confirm or update what I have found.

      1) Developing a new gas or oil well in the US costs about $2million to $10million.  Costs include geo analysis, drilling and setting well head. Off shore on more expensive end.   (This seems high to me).   General trend is offshore and deeper, thus more expensive with time.
      2) The average US oil well produces about 20 barrels per day (range from 2 to 1000).
      3)  The average US gas well produces about 150 thousand CF per day (26 oil equivalent barrels per day).
      4)  The average US oil or gas well produces for about 5 years (?).
      5)  There are about 7,000 new wells drilled per year with only 30% dry (years 2000 to 2002).

      Something seems wrong with those facts because the pay back would be $2million/(20bl/day*$25/bl*365day/yr) = 10 years.  Hardly a worthwhile investment.

      Where I am going with this is that 20 bl/day is 1,400 kW.  A wind turbine producing the same energy as the average oil well has an investment cost of about $1 million, 100% success, and will last 20 years.  People would get a better return on their investment if they would stop investing in oil wells and start investing in wind turbines.  Before I make this arguement, I want to make sure I have my facts straight.  Any insight would be appreciated.

      Sincerely,
      Chris Boyer

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