By OGJ editors
HOUSTON, Nov. 4 -- The number of onshore US marginal oil wells increased last year, but production totals for those wells dropped from the previous year, the Interstate Oil and Gas Compact Commission reported.
IOGCC's annual study showed 397,362 marginal oil wells produced 311 million bbl in 2004, or an average of 2.14 b/d/well. During 2003, a total of 393,463 stripper wells produced 313.7 million bbl, or an average of 2.18 b/d/well.
Marginal wells accounted for 15.7% of oil and 7.8% of gas produced in the US onshore in 2004. A marginal oil well produces 10 b/d or less. A marginal gas well produces 60 Mcfd or less.
The number of marginal gas wells has climbed steadily since 1995, IOGCC said in its report, "Marginal Oil and Natural Gas: American Energy for the American Dream."
US gas stripper wells during 2004 numbered 271,856 and produced 1.54 tcf of gas, or an average of 15.5 Mcfd/well—the same average production rate as 2003, when 260,563 wells produced 1.48 tcf.
During 2004, the report noted that 4,129 marginal gas wells were plugged and abandoned. This was the highest number since 1998, when 4,203 gas wells were plugged and abandoned.
If all marginal wells were abandoned in 2004, the US would have lost more than $20 billion in revenue and 200,213 jobs, the report said.
"Marginal wells are a stable source of much-needed American energy," said Christine Hansen, IOGCC executive director. "Collectively, they provide significant resources needed to create jobs in our economy and lessen our dependence on foreign resources."
American Petroleum Institute statistics show the US last year imported 4.7 billion bbl of crude oil and products. "If the oil production from marginal wells active in 2004 did not exist, imports would have increased 6.6% to make up for the shortage," the report said.
The IOGCC represents the governors of 30 oil and gas producing states. Seven states are associate members.