The price of crude oil surpassed $75 per barrel today on the New York Mercantile Exchange.  This is the highest price ever paid for oil since crude began trading on the NYME.  This price increase accompanies shortages of gasoline in many parts of the country.  This is largely due to the elimination of the gasoline additive MBTE and replacing it with ethanol.  MBTE has been cited as a polluter of groundwater.  http://www.ericwilder.com  http://justeastofeden.blogharbor.com  http://ericwilder.blogspot.com 

Looking for that elusive supergiant oil field in Kazakstan?  Hoping to locate a positive structural anomaly in North Africa?  Well, my friends, by prepared to spend billions, not millions, and have a decade or so pass you by until that first newly-produced drop of oil reaches its initial market.  Can’t wait that long?  Why not drill a few development wells in Oklahoma and have them producing by the end of the year?

The No. 1 Nellie Johnstone, drilled in 1897 was Oklahoma’s first commercial oil well.  Oil production peaked in 1927, producing 278 million barrels of oil that year, an average of 762,000 barrels of oil per day.  Drilling continues in Oklahoma, mostly by small independent oil companies.  With proven reserves at 550 million barrels of oil, Oklahoma ranks fifth among states in the U.S.  When compared with Saudi Arabia’s proven reserves of oil, Oklahoma doesn’t hold a candle.  Still, its oil is worth a whopping $33 trillion dollars at $60 per barrel.

No new giant oil fields are likely to be discovered in Oklahoma and major oil companies have long since abandoned the state to explore for the elusive supergiant overseas.  Still, many undrilled prospects exist and as yet untapped oil and gas reserves remain in commercial quantities.

Consider this: The estimated cost to drill a 7,000’ well in Logan County, Oklahoma, including development acreage, is around $800,000.  Development acreage exists, often directly offsetting commercial oil and gas wells.  Part of Logan County is situated on a giant subsurface structural feature known as the Nemaha Ridge.  The Oklahoma City Field and the Garber Field, both proven giants, are situated on the Nemaha Ridge.  As many as 30 pay zones exist in Logan County, a true multi-pay target area.

Offsetting known production greatly reduces the risk of drilling a dry hole or non-commercial producer.  A single well recovery of only 0.150 BCFG and 15,000 BO ( a reasonable expectation, actual ultimate production per well could be much greater, or less) would be worth about $2,000,000 at today’s prices.  Only a 2.5:1 return on investment, you say?  Maybe so, but a return earned without having to bet the farm, with much less risk of failure, and without having to wait a decade to see your first dime of profit. http://www.ericwilder.com  http://justeastofeden.blogharbor.com  http://ericwilder.blogspot.com

Crude oil closed today on the NYME at $71.35, a record high price for a barrel.  Natural gas also closed higher, at $8.01 MCF, but still well below its record high.  Unrest in Nigeria, Iran and now Chad are pushing the price upward.  Crude oil is now in uncharted territory and it will likely be a week or so before traders have an idea what the ceiling will be.  http://www.ericwilder.com  http://justeastofeden.blogharbor.com

A giant oil field is defined as one capable of ultimately producing 500 million barrels of oil.  A super giant oil field is capable of producing 1 billion barrels of oil.  Four super giants, all discovered prior to 1985, are the largest daily producers of oil, about 9 million barrels per day.  Of these, the Ghawar Field in Saudi Arabia, produces about 4.5 million barrels of oil per day.  The second largest producer, the Cantarell Complex in Mexico, began production in 1979 and is currently producing around 2.1 million barrels of oil per day.

China's Da Qing Field and Kuwait’s Burgan Field each produce about 1 million barrels of oil per day.  What is disturbing is that these fields have all reached their maximum daily production capacity and have begun to decline.  By contrast, the largest oil field in the United States is Prudhoe Bay in Alaska.  Oil production from this field peaked in 1987 and has fallen 75% since then.  Prudhoe Bay produces about 450,000 barrels of oil per day, about 6% of the United State’s cumulative daily production

The Ghawar Field, discovered in 1948, covers an aerial extent of about 300 square miles.  The northern portion of the field is largely pressure-depleted and producing ever-increasing amounts of salt water instead of oil and gas.

It is amazing and also frightening that an oil field discovered in 1948 is still the largest daily producer of  world oil.  Production from the Ghawar Field has most assuredly peaked and is declining at a predictable rate.  What happens when production from this field is gone?  The short answer is chaos.  http://www.ericwilder.com  http://justeastofeden.blogharbor.com

Crude oil closed today on the New York Mercantile Exchange at $69.32 per barrel.  The primary reason is market jitters heading into the long Easter weekend – jitters caused by continued unrest in Iran and Nigeria, and the rapidly approaching hurricane season.  Prices settled only 53 cents shy of the post-Hurricane Katrina high of $70.85 and could possibly exceed the record next week as increased seasonal driving activities and gasoline consumption begins in earnest.  http://www.ericwilder.com  http://justeastofeden.blogharbor.com

The Daily Oklahoman recently reported an earthquake in Carter County, Oklahoma.  While not as prevalent as in places like California, earthquakes occur with some regularity in Oklahoma.  Inventory, Detection, and Catalog of Oklahoma Earthquakes, written by James E. Lawson, Jr., et al, and published by the Oklahoma Geological Survey, reports around 200 earthquakes have occurred in Oklahoma since 1900.

 

The publication further reports that in 1952 an earthquake centered near the town of El Reno was felt in Des Moines, Iowa to the north and Austin, Texas to the south - an area of 140,000 square miles. 

Like many other states, Oklahoma has stationary seismic stations from which they inventory both Oklahoma earthquake activity as well as tremors around the world. http://www.ericwilder.com  http://justeastofeden.blogharbor.com

Crude oil on the New York Mercantile Exchange is trading today at prices above $68 per barrel.  Published reports that the U.S. potentially has plans to attack Iran are driving this increase in prices.  Continued disruption in Nigeria is also upwardly affecting crude oil prices.  While world demand for oil has lessened, according to some reports, traders are jittery because of Iran and Nigeria, and also because of possible disruptions in supply caused by the rapidly approaching hurricane season.  http://www.ericwilder.com  http://justeastofeden.blogharbor.com

According to the Wall Street Journal, a spokesperson for the American Association of Petroleum Geologists stated that 80% of the oil found in this country is done so by wildcatters, and not major oil companies.  http://www.ericwilder.com  http://justeastofeden.blogharbor.com