American Oil and Gas Reporter - October 2016 - 114

TABLE 1B
National Stripper Gas Well Survey 2015

State
Alabama
Arizona
Arkansas
California
Colorado
Illinois
Indiana
Kansas
Kentucky
Louisiana
Maryland
Michigan
Mississippi
Missouri
Montana
Nebraska
New Mexico
New York
North Dakota
Ohio
Oklahoma
Pennsylvania
South Dakota
Texas
Utah
Virginia
West Virginia
Wyoming
Total

Number of
Stripper Gas
Wells

Production from
Stripper Gas
Wells (Mcf)

Average Daily
Production per
Well

Marginal Share
of Total
Production

5,416
3
3,878
819
18,915
640
1,059
16,932
19,439
15,449
7
7,886
1,475
4
5,393
141
14,292
6,699
155
32,154
45,340
65,755
66
56,561
2,905
1,731
52,684
2,180
377,977

51,417,194
53,728
29,843,423
7,288,955
189,207,817
427,987
6,525,005
166,696,500
139,090,703
56,865,395
43,295
71,072,012
1,335,810
9,000
26,219,406
375,328
122,454,849
9,202,778
797,909
55,311,561
310,610,973
102,196,082
225,240
406,325,755
30,135,108
14,480,577
136,611,541
20,468,449
1,955,292,380

26.0
49.1
21.1
24.4
27.4
1.8
16.9
27.0
19.6
10.1
16.9
24.7
2.5
6.2
13.3
7.3
23.5
3.8
14.1
4.7
18.8
4.3
9.3
19.7
28.4
22.9
7.1
25.7
14.2

30.4
54.3
2.9
3.3
11.1
12.5
90.0
57.0
100
3.2
100
66.1
2.4
100
85.5
100
9.7
51.9
0.1
5.5
12.4
2.1
1.5
4.9
7.1
10.9
10.6
1.1
7.0

numbers have increased since 2012, the report notes the market value of marginal oil
and gas production has dropped, falling to
$18.1 billion in 2015, the lowest market
valuation for total marginal production
since 2003. It cites the collapse in crude
oil prices as being the most significant factor in the decrease.
Marginal oil well production has remained in a slow, steady uptrend since
2008, consistent with the slowly growing
number of marginal oil wells, IOGCC
says. Since the 2012 survey, marginal oil
production has increased 5.9 percent,
from 276.3 million barrels of oil annual-

ly to 292.5 MMbbl. Conversely, the report indicates, the steady long-run increase in marginal gas production seen for
several decades reversed course in 2010,
and remains in a moderate downtrend.
Marginal gas production dropped 6.0
percent since 2012, despite increasing gas
well numbers, the commission says. Total gas production in 2015 dropped to 1.96
Bcf, 10.0 percent down from the 2.17 Bcf
peak reached in 2010.
Market Forces
During the three-year survey period,
IOGCC says two key market forces were

at work to reduce the role played by marginal well activity:
* A dramatic rise in U.S. production
from readily available reserves has shifted focus away from maintaining long-run
production from marginal wells.
* The collapse in oil prices places the
economic viability of many more marginal wells in jeopardy.
Extending the life of mature oil and gas
fields continues to play an important transition role in domestic production by
keeping them active and available for
further exploration, the survey says. "Marginal production requires the ongoing
use of roads for servicing access and the
maintenance of local pipelines for distribution. The wide, national footprint of marginal well activity has helped ease the path
for unconventional drilling and exploration
activity in most fields across the country,"
IOGCC says.
"Stripper wells are the small business
sector of the nation's oil and gas industry.
They frequently are family owned, predominantly in rural areas, and are passed down
through generations," says Darlene Wallace,
National Stripper Well Association chairwoman and owner/operator of Columbus
Oil Company in Seminole, Ok. "Stripper
well producers know there are tremendous
economic benefits from extending the operations of oil and gas production from existing wells as long as possible."
Eliminating marginal wells would trigger an estimated direct loss of 57,560 jobs
in the oil and gas sector and $4.4 billion
in direct earnings within the survey states,
the report states.
"The IOGCC marginal well report
highlights the value of these reserves to the
U.S. economy," says Research Partnership
to Secure Energy for America President
Thomas Williams. "The report also lays out
the groundwork to identify policies focusing on marginal and conventional wells in
the United State for fair taxes and reasonable regulations, as well as investments in
research and development needed to lower costs while reducing the environmental impact, particularly during this time of
low commodity prices."
❒

Energy Ban Likely To Harm Economy
DENVER-Proposals by presidential
candidate Hillary Clinton and other politicians to ban oil, natural gas and coal production on federal lands and waters would
cost the United States hundreds of thousands of jobs and billions of dollars in revenues, the U.S. Chamber of Commerce's
Institute for 21st Century Energy argues.
The first report in the institute's Ener-

gy Accountability Series, What If . . . Energy Production Was Banned on Federal
Lands and Waters? examines the implications of adopting development-limiting
proposals. If the policies were enacted, the
Energy Institute report predicts 25 percent
of the nation's oil, natural gas and coal production would halt, and the United States
would lose $11.3 billion in annual royal-

114 THE AMERICAN OIL & GAS REPORTER

ties, 380,000 jobs, and $70 billion in annual gross domestic product.
The public debate over energy development on federal-lands has changed
sharply over the past decade, the report
notes. Less than 10 years ago, only the
most extreme congressional members
were antagonistic enough to argue against
such development. As gasoline prices



Table of Contents for the Digital Edition of American Oil and Gas Reporter - October 2016

Contents
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