CAN YOU AFFORD TO PLUG THOSE INACTIVE OIL WELLS?
The State of Texas is serious about protecting it surface and ground waters. Pursuant to authority granted by the Texas Legislature, the Texas Railroad Commission adopted strict requirements concerning oil and gas wells that had the potential of contaminating water sources. Some of those requirements concern inactive land wells and are found in Rule §3.15 of Title 16 of the Texas Administrative Code.
An inactive oil well is defined as an unplugged land well that has been spudded or has been equipped with cemented casing and that has had no reported production, disposal, injection, or other permitted activity for a period of greater than 12 months. 16 TAC §3.15(a)(6). In order for the oil well to remain or to be placed on active status, the well must have reported production of at least 10 barrels of oil each month for three consecutive months. 16 TAC §3.15(a)(1).
The Commission utilizes an administrative process to track and monitor inactive wells. Each producer is required to file a H-15 Form with the Commission on an annual basis. From those forms and other information currently in its possession, the Commission recently estimated that there were approximately 111,000 inactive oil wells in Texas and that 39,213 of those wells had been inactive for 10 years or more.
Pursuant to Rule §3.15, an operator who has responsibility for an inactive land well must take one of three steps. The operatory must either: 1) restore the oil well to active status; 2) plug the oil well; or, 3) obtain an extension to the plugging deadline.
Texas law prohibits the Commission from renewing the P-5 organization report of an operator that has not obtained a plugging extension for each of its inactive oil wells. To get a P-5 renewal under current Texas law, an operator who is responsible for inactive oil wells that are more than 25 years old must perform either a successful fluid level test once every 12 months or a successful hydraulic pressure test (also known as a mechanical integrity test or “MIT”) once every five years, on all inactive wells that were more than 25 years old.
Compliance with Rule §3.15 has the potential of creating serious economic hardships for the producer. Depending upon the circumstances encountered, the actual process of plugging an inactive oil well or re-establishing production can cost as little as a few thousand dollars and as much as hundreds of thousands of dollars.
Often times, the least expensive option may be to obtain an extension to the plugging deadline. However, that option can prove to be very expensive if the inactive well has been inactive for 10 years and is more than 25 years old.
Many marginal or stripper oil wells are in an inactive status as a result of low oil production and plunging oil prices. During times of economic instability, many oil producers found it more economical to scavenge oil field equipment from inactive wells for usage on producing wells. Those same producers are now faced with the prospect of spending tens of thousands of dollars on equipment needed to re-establish production from inactive wells or to plug those wells.
The Oil Hound Lift System® provides an inexpensive solution to Rule §3.15 compliance issues. The Oil Hound® Oil Lift allows a producer to re-establish production in an inactive well or, in the alternative, to test fluid levels. Testing and re-establishment of production is accomplished without the use of expensive workover rigs. Moreover, with the Oil Hound® Oil Lift, the producer does not have to be concerned with workover rig availability.
The Oil Hound® Lift Unit, designed and manufactured by Liftek, Inc. Inc. – a company dedicated to oil recovery enhancement – is a specialty device whose primary purpose is to produce oil and other liquids. The unit is a patented smart system, which is a cost-effective alternative to traditional means of oil recovery and fluid production.
Stripper well revitalization programs that are adopted by successful oil producers often include improved or new oil recovery technologies. Those same oil producers recognize that the new technologies utilized within the Oil Hound® Lift Unit both improve production and reduce operator costs. That same new technology helps to improve the environmental footprint of stripper well operations.
The cost associated with the operation of the Oil Hound® Lift Unit is relatively small. The manufacturer maintains that its unit is the most cost efficient artificial fluid lift technology available on today’s market for its applications. The goal of most every oil producer is to increase efficiency of oil production. The Oil Hound® Oil Lift unit will help the oil producer to reach that goal.
The unit produces oil without using pumping jacks, rods, tubing or down-hole pumps and can be operated continuously, on a timed cycle or on the basis of fluid level. In addition, this system requires no special or expensive site preparation once the well bore has been completed.
Wells with sand or paraffin problems are no longer a concern. Inactive wells can now be tested without expensive and time-consuming workover machines. Moreover, the Oil Hound® does not require the use of any other artificial lift equipment.
This unit can either be operated as a stationary fixed unit or as a mobile unit, which allows it to be used to produce fluids from multiple wells. The Oil Hound® Lift Unit systematically operates on a cycle using technology that locates and records fluid levels during every cycle.
Liftek maintains that the unit is the most cost-efficient artificial oil lift technology available on today’s market and will save producers thousands of dollars per year in reduced compliance costs.
The Oil Hound® Lift Unit will also save the producer thousands of dollars by eliminating the need for rods, tubing, down hole pumps, workover rigs and other well servicing costs.
The total weight of the unit is only 1650 pounds and yet it is constructed primarily of stainless steel and iron. It is very durable as well as easily handled and maneuvered. It can be installed on a trailer allowing it to be towed behind a lightweight vehicle and delivered easily to the wellhead location. Installation is very simple and can be completed by two workers in less than 1 hour. With practice, one person can install and operate it in about the same time.
Multi-tasking is the Oil Hound’s® specialty. In the area of oil exploration production and regulatory compliance issues, it provides an easy and inexpensive means to determine fluid levels and oil percentages, and to establish oil production without the expenses associated with pumping units, rods, tubing and down hole pumps.
Producers have discovered that the Oil Hound Lift Unit is an in-expensive method to comply with Texas Railroad Commission Rule §3.15.
Liftek, Inc. Revitalizing the Stripper Well Industry
Toll Free 855-33 HOUND or 855-334-6863