Small Oil Producers Worried About Future Of Vertical Drilling

Friday, May 19th 2017, 5:18 pm
By: Grant Hermes

Small producers say there are two kinds of wells in this area -- those that have been hit by horizontal drillers and those that haven't yet. 

Inside a garage, small oil and gas producers across Oklahoma shared a meal and stories of how their livelihoods are at risk from larger horizontal drilling companies.

“No gas. No oil, nothing. We just got water,” one producer said about his traditional vertical wells being hit by horizontal drilling.

The practice of horizontal drilling is the industry practice of drilling into the earth and then making a 90 degree turn to extract oil and gas along plays horizontally. The problem, however, is the immense amount of pressure used. Small producers with nearby wells say the pressure forces oil and gas out and water into their wells, rendering them unprofitable and even useless.

“I've had wells been (sic) fracked into well over a mile and a half, some of them almost two miles away,” Steve Gilliland said. “That's a lot of pressure underground.”

Horizontal drilling has spiked in the last 10 years. In 2007 just 15 percent of wells were horizontal. Last year it was 81 percent.

“They’re projecting they’re going to lose 70 percent of their wells in the next few years. I think that's probably conservative,” said small producer Joe Warren [about vertical well owners].

But large energy companies say it's all just talk. In a statement, the president of the Oklahoma Oil and Gas Association Chafe Warmington said, "In the midst of this modernization of drilling practices, Oklahoma has provided protections for small, vertical producers. Since 2014, only 15 cases of damage to vertical wells have been reported."

But, small producers say the unreported number is hundreds of wells above that. Some also said the state is on the side of the big companies making it impossible to win.

“It's happening over and over and over again,” Gilliland said. “How do I leave something to my children when the horizontal companies are taking it all away?”