American Oil and Gas Reporter - July 2015 - 163

ConventionCoverage: Tennessee Oil & Gas Association

Tennessee Reserves Aplenty
In Its Old 'Stinker' Wells
By Corinne Westeman

GATLINBURG, TN.-There is still
plenty of oil left in the Tennessee soil,
and it's up to the state's operators to
extract it.
At the Tennessee Oil & Gas Association annual meeting May 20-22 at Gatlinburg's Park Vista Hotel, TOGA pastPresident Bill Goodwin talked about how
important stripper wells and secondary
recovery were to Tennessee production.
"The average Tennessee stripper well
makes 0.50 barrels a day," Goodwin said.
"In Texas, it's 10.00 bbl/d; in Oklahoma,
4.00 bbl/d; in Ohio and West Virginia,
0.25 bbl/d. So, Tennessee's average isn't
that bad. But it could always be better.
"At $100 oil, a 1.00 bbl/d well grosses
about $36,000 a year, which would be
$26,000 after royalties and operating
costs," he continued. "A 0.50 bbl/d Tennessee well makes $18,000, and at today's
prices it's more like $12,000 yearly gross."
Goodwin also contrasted the vastly
different origins of the Volunteer State's
oil industry: Tennessee lacked a major
oil company that could help form budding
independent oilmen. "Those of us who
got into the industry in the 1960s and
'70s came from other industries," he
commented. "We learned by doing, and
we had no teachers. Any experienced
oilmen we had were practiced in drilling,
not production."
Goodwin maintained that Tennessee
oilmen followed a pattern: "Promote a
well, drill it, complete it, and then put it
on pump," Goodwin detailed. "We would
turn it over to a pumper, who was usually
the lowest man on the company totem
pole-usually, a local guy hired to work
on the rig."
According to Goodwin, Tennessee is
home to about 800 producing oil wells,
more than 3,000 abandoned ones, and
companies are drilling fewer than 100
wells in the state each year. Meanwhile,
production logs indicate the average Monteagle well will produce about 20,000
barrels, while the output from a Ft. Payne
well comes to about 60,000 barrels.
"Doing some math, we find that a 30-

to 50-year-old well has almost half the
recoverable reserves still in the ground,"
he added. "Our reserve study of 120 Ft.
Payne wells found that only about 5,000
barrels of oil had been harvested from a
majority of those wells. So, there is plenty
of oil left, and we need to get it out."
Goodwin emphasized the operator's
role in the entire production process,
saying that, "all too often, the operator-
the person with the most to lose or gain-
really isn't involved in the well's production." Instead, he assessed, the operator
is too focused on raising money to drill
the next well.
Tennessee has an abundance of socalled "stinker wells," he characterized,
which were drilled in the '70s and '80s
by inexperienced promoters who produced
them at volumes around 1.00 bbl/d before
leaving them. "The people who promoted
stinker wells gave real operators a bad
name," Goodwin suggested. "And because
of those bad experiences, many landowners, investors and subcontractors mistrust
oilmen."
However, he surmised, such stinker
wells could be worth revisiting for secondary recovery. Even so, Goodwin cautioned potential buyers to beware of poor,
inaccurate or missing well records and
logs. "Some promoters lied about their
wells' initial production rates, and some
never bothered to produce the well at
all," he stated. "You really cannot trust
these records, and that makes it difficult
if you want to revisit those well sites for
secondary recovery."

In-Depth Details
Whether an operator is working over
an old well or drilling a new one, Goodwin
had several recommendations. Operators
should know their wells inside and out,
he advised.
"It is easy to tell the pumper, 'Let me
know when you have oil to sell; I have
other wells to work on now,'" Goodwin
said. "But it's a terrible mistake. I know
because I have done it dozens of times.
Hopefully, by now, I have convinced
you that the operator needs to be involved
in the pumping and producing process-

es."
According to Goodwin, the specifics
an operator or production supervisor
should know about a well include its:
* Formation, such as its depth, characteristics, casing program, and any stimulation treatments;
* Equipment, such as the downhole
pump's type and age, and where it is
placed in the formation, relative to the
perforations;
* Pumpjack specifications, including
its size, stroke per minute, stroke length,
condition, maintenance requirements, and
serial number; and
* Site's exact details and environment,
such as its power source, the location's
condition, the number and condition of
the access roads, and the site tanks' conditions.
"You need to keep proper and accurate
records of all this information on every
well," Goodwin emphasized. "All operators know this, but few actually do it. I
was told, 'Never trust your memory with
what makes your money," and I always
have found that to be solid advice; so
keep good records."

Tennessee's older stripper wells have
plenty of recoverable reserves, comments
TOGA past-President Bill Goodwin. During TOGA's annual convention at the
Park Vista in Gatlinburg, Tn., Goodwin
stressed that operators should revisit
these wells, and take note of their conditions and possibilities.

JULY 2015 163



American Oil and Gas Reporter - July 2015

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