Cardinal Energy Group is a company managed by specialized energy experts. Combined they encompass 150 years industry experience. They have worked together for several years to build Cardinal into an independent energy producer.
Cardinal’s management is focused on a growth plan that prescribes reworking “marginal” Oil & Gas wells that are located in mature fields that are neglected or “walked-away-from” by their former operators. They have found that these marginal fields still have significant proven reserves that can be produced economically using new methods and technology.
There are thousands of mature oil and gas fields across the lower 48 states that encompass thousands of these marginal wells, commonly referred to as “stripper” wells – wells that produce less than 15 barrels of crude oil per day. Few lay people realize the importance of these wells and their significance in supplying domestic crude oil and natural gas to the US. Domestic marginal wells produced more than 335 million barrels of oil in the United States in 2006. That is equivalent to more than 60 percent of the crude oil the United States imports annually from Saudi Arabia. It has recently in 2012 been projected that United States will become the world’s largest oil producer by 2020.
Cardinal’s present strategy consists of acquiring marginal wells throughout the Appalachian Basin, which have been drilled to the reliable Clinton Sandstone or Knox formation. Therein They are focused on selecting undervalued assets or over-leveraged companies where there is a clear upside from their purchase, due to the commodity price increase and/or by the application of Cardinal’s calculated exploitation strategy.
The current production theories that recommend new drilling and fracking methods utilize today’s technology to make it possible to re-enter these older wells to recover the stranded reserves economically. In addition to remediating or reworking the existing wells they also continue development of the field by drilling and completing new wells adjacent to the existing wells, thus increasing the overall production of a given field.
They intend to deploy our Appalachian Basin strategy throughout the continental United States as opportunity arises.
Cardinal Energy Group’s dedicated, experienced team has the requisite expertise and track record necessary to maximize value in the current market.
The top ten US stripper well states.
A stripper well or marginal well is an oil or gas well that is nearing the end of its economically useful life. In the United States of America a “stripper” gas well is defined by the Interstate Oil and Gas Compact Commission as one that produces 60,000 cubic feet (1,700 m3) or less of gas per day at its maximum flow rate; the Internal Revenue Service, for tax purposes, uses a threshold of 75,000 cubic feet (2,100 m3) per day. Oil wells are generally classified as stripper wells when they produce ten barrels per day or less for any twelve month period.
In the United States of America, one out of every six barrels of crude oil produced comes from a marginal oil well, and over 85 percent of the total number of U.S. oil wells are now classified as such. There are over 420,000 of these wells in the United States, and together they produce nearly 915,000 barrels (145,500 m3) of oil per day, 18 percent of U.S. production.
Additionally, as of 2006, there are more than 296,000 natural gas stripper wells in the lower 48 states. Together they account for over 1.7 trillion cubic feet (48 km3) of natural gas, or about 9 percent of the natural gas produced in the lower 48 states. Stripper wells are more common in older oil and gas producing regions, most notably in Appalachia, Texas and Oklahoma.
Many of these wells are marginally economic and at risk of being prematurely abandoned. When world oil prices were in the low tens in the late 1990s, the oil that flowed from marginal wells often cost more to produce than the price it brought on the market. From 1994 to 2006, approximately 177,000 marginal wells were plugged and abandoned, representing a number equal to 42 percent of all operating wells in 2006, costing the U.S. more than $3.8 billion in lost oil revenue at the EIA 2004 average world oil price.
When marginal wells are prematurely abandoned, significant quantities of oil remain behind. In most instances, the remaining reserves are not easily accessible when oil prices subsequently rise again: when marginal fields are abandoned, the surface infrastructure – the pumps, piping, storage vessels, and other processing equipment – is removed and the lease forfeited. Since much of this equipment was probably installed over many years, replacing it over a short period should oil prices jump upward is enormously cost prohibitive. Oil prices would have to rise beyond their historic highs and remain at elevated levels for many years before there would be sufficient economic justification to bring many marginal fields back into production.
FROM Department of Energy:
One out of every seven barrels of oil produced in the United States comes from a stripper well – a well whose production has slowed to 10 barrels of oil a day or less. There are over 340,000 of these wells in the United States and together they produced 260 million of barrels of oil in 2008, enough to fuel half the jet planes flying in the United States.
Stripper gas wells, defined as wells producing less than 60 thousand cubic feet a day, are also significant contributors to the nation’s energy needs. Over 300,000 stripper gas wells produced 2 trillion cubic feet of gas in 2008, enough for about 25 million homes. Stripper wells are more common in older oil and gas producing regions, most notably in Appalachia, Texas and Oklahoma.
Many of these wells are marginally economic and at risk of being plugged, leaving significant quantities of oil remaining behind. In fact, several thousand stripper wells are plugged each year. Once a well becomes uneconomic and is plugged, any remaining oil (sometimes as much as two-thirds of the original oil) is unlikely to ever be recovered. This is because of the high cost of re-drilling the well or replacement well and installing pumping, storage and transportation facilities. Therefore, keeping stripper wells in production helps maintain a strong domestic energy supply. The Department of Energy Stripper Well Revitalization effort is committed to developing technologies to improve the performance of marginally economic wells through the Stripper Well Consortium.
Stripper Well Consortium
The Stripper Well Consortium, an industry-driven program started in 2000 and managed by the Pennsylvania State University, is co-funded by the Department of Energy and the New York State Energy Research and Development Authority. The Stripper Well Consortium has 97 members including companies/organizations from 23 states, the District of Columbia and Canada. An Executive Council selects research projects proposed by members that will lead to improving oil and natural gas production from stripper wells. The process of having industry develop, review and select projects for funding ensures that the Consortium conducts research that is relevant and timely to the oil and natural gas industry. The Consortium has committed over $10.5 million through September 2011 for over 100 projects co-funded by industry, including 11 projects selected for the October 2010 through September 2011 funding cycle.
Stripper wells produce large quantities of water in addition to the oil and natural gas. Producers not only have the added cost of pumping the water to the surface and disposing of it but when water fills the wellbore it impedes the flow of oil or gas, reducing production rates. Therefore a major focus of the Stripper Well Consortium has been on the development of technologies to more efficiently clear water from wellbores. One successful project is the Gas Operated Automatic lift (GOAL) PetroPump developed by Brandywine Energy and Development Company. The device uses the pressure of gas moving into the bottom of the wellbore to move fluid out of the well. The inexpensive, easy to operate device is more efficient than alternatives and has been shown to boost gas production as much as 300 percent.
The DOE also conducts other activities that help stripper wells. The Rocky Mountain Oilfield Test Center (RMOTC), operated by DOE at the Teapot Dome Field, located near Casper, Wyoming, provides facilities to test and validate new technologies in an operating stripper oilfield.
The Petroleum Technology Transfer Council, with support from the DOE, provides workshops and information on technologies and best practices for oil and gas producers, many of whom operate stripper wells.