Important update from the EIA indicating result of reduced exploration for natural gas.

http://www.bloomberg.com/apps/news?pid=20602099&sid=aU52fHgh22zY

Eric’s Web

The oil business is either the world’s worst addiction or an incurable disease.  Nothing hurts more than learning that the prospect you tried for a year to drill is a dry hole.  Conversely, there are few things more viscerally satisfying than hearing oil pouring into a frac tank after perforating a zone about which you had doubts.

During the last oil boom, my wife Anne and I had a mom and pop oil company.  We had leased enough acreage to drill a single well but had taken options on the offset leases just in case we were successful.  The problem is our options were ready to exercise before we managed to raise the money to drill our first well.  When we finally raised the money, we had a week or so to make a decision that would cost many thousands of dollars if we guessed incorrectly.

We were looking for two elusive zones, the Misener and, or, the Skinner Sand.  Either zone a company maker, we had a lot riding on the well’s outcome.  We finally drilled the well and it was late at night when we pulled the final electric log to the surface.  Anne and I were heartbroken when we learned that the Skinner was structurally low and nonproductive, the Misener nonexistent.

We set pipe anyway because there is a massive carbonate in the well called the Mississippi Lime in the well bore that usually produces, albeit sometimes in less than commercial quantities.  A full moon lit the sky as Anne and I drove away from the location late that night.  Anne was sobbing softly.

“I can’t believe our first well is such a disaster,” she said.

“Don’t give on her just yet.  You never know what a Mississippi well will do until you frac it.”

“You’re just saying that to make me feel better,” she said.

Maybe I was.  Still, when we fractured the well a week later, it began producing 400 BOPD, along with lots of natural gas.  The well was a monster and we needed four oil tanks to handle its rate.  Unfortunately, I did not believe my own hype and had let the offset options expire.  Another company picked them up and eventually drilled four wells as good as ours.

We went on to drill thirty wells in Oklahoma before the oil bust finally caught up with us.  Our first well continued to produce, as did the others we drilled, but Anne and I were already on the outside looking in.

Somehow, we managed to survive and I have drilled many more wells since then.  I am still just as blown away when I drill a dry hole and just as elated when I hit a big one.  I don’t really know if it’s an addiction or a disease but I do know that I have a bad case of oil fever, and there is no known cure.

Eric’s Web