The process all begins with a drilling rig being delivered to the location with all the necessary equipment to perform the job and generate the necessary power to supply the operation.
The rig then rotates a drill string of pipe behind a drill bit to the required depth. After the hole is drilled, 30 foot sections of steel casing are then lowered into the hole.
Concrete is pumped between the casing and the bore hole which gives the casing structural integrity and isolates potentially high pressure or caustic zones from each other as well as the surface. The entire string of pipe may include as many as 5 or 6 progressively smaller diameter sections of pipe.
While the well is being drilled, drilling fluid, often referred to as “mud’ is pumped down the inside of the drill pipe and out jets located on the drill bit. This mud cools the drill bit, washes cutting up for analysis, and coats the wellbore to prevent the hole from caving in.
Once total depth is reached, the operator generally determines what tests or logs they desire to run down hole and then evaluates those along with the cuttings or mud logs.
After drilling, casing and logging a well, an operator will determine whether the well is productive. Then the well must be completed.
Completion of Oil Rig
Completion is sometimes done keeping the drilling rig on location but more commonly with a lower cost completion rig on location.
Most completions are cased hole completions whereby the prospective zone(s) are perforated using a perforating gun. At that time acids and fracturing fluids are pumped into the well to fracture, stimulate and clean the reservoir rock to optimally produce hydrocarbons into the wellbore.
A packer is then set in the casing above the productive reservoir and connected to the surface by virtue of tubing placed inside the casing. At the surface there is then connected to the pipe a series of valves often called a Christmas tree which regulate pressure, control fluid and gas flow, and allow future work on the well.
Some reservoirs have sufficient reservoir pressure for the oil and/or gas to flow naturally to the surface. However, most require artificial lift methods such as down hole pumps, gas lift, or more commonly pump jacks. The optimal pump aide is then connected and then attached to the necessary surface separators, tank batteries, or pipeline facilities to take the gas and/or oil to the refineries and natural gas compressor stations.
What’s Better? Oil or Natural Gas Production?
That is a question that is really more a function of timing than anything else.
In theory, natural gas and crude oil should sell in the open marketplace for the same price per BTU, or British Thermal Unit, which is the standard measure of heating capacity for both.
However, in the real world the two commodities sell for whatever the market will bear, taking into account that oil is basically a global commodity and natural gas is a regional commodity. By saying this I mean that oil can be shipped worldwide for ultimate sale and consumption but natural gas is basically only sold and consumed in the general area it is produced and delivered by pipeline. This is changing currently to some extent with advances in CNG, or compressed natural gas, which allows natural gas to be stored and shipped.
As of early 2014, crude oil is selling for around $100 per barrel, while natural gas is selling at around $4 per thousand cubic feet. At those prices, oil is selling at a considerable premium to gas and therefore for the short term I would rather have oil production.
However, if you are acquiring future reserves I would currently favor gas to oil simply because I feel there is much more commodity pricing upside to gas as opposed to oil.
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