Texas Oil Leases
Our Focus On Oil
In Texas there are many older oil wells that produce less than 10 Barrels Of Oil Per Day (BOPD). These marginal oil wells are most often referred to as “stripper” wells. In Texas alone there are 141,582 oil wells (last count), and 79.4% of these produce less than 10 BOPD which categorizes them as marginal or stripper wells. Many oil leases with stripper wells have been shut down, abandoned or have reduced production (and attention). These oil leases with stripper oil wells often become available for sell.
These oil leases become available for several reasons:
- Larger companies loose interest because of declining production
- Older leases are transferred to children or heirs who are not interested in the oil industry
- The wells become neglected with no attention or poor maintenance and no rework
- Production income declines below market prices.
- Production profits are not high enough for the owner.
- A particular party needs to divest of assets
Most stripper wells (leases) have lost their original Initial Production (IP) and have stabilized at a lower but consistent production level. With proper rework these stripper wells can produce cash on a monthly basis with little decline and a long life.
Much attention is paid to highly producing wells that can bring in 100 to 300 Barrels Per Day (BPD) while the older marginal/stripper wells are ignored or less attractive. According to the Independent Petroleum Association of America (IPAA), these marginal/stripper wells comprise 84 percent of (US) domestic oil wells and produce over 20 percent of all domestic oil. This 20% is an amount roughly equal to US imports from Saudi Arabia.
The average stripper well produces only about 2.2 barrels per day. However, if untapped pay zones could be perforated or rework involved the BOPD could go as high as 10 BOPD.Sometimes the practice of water flood (injection) to increase the formation pressure that resulted in the removal of oil will increase production.
Recently an oil lease owner and operator in North Central Texas was reworking their old marginal wells and upon cleaning out, reworking and doing a good log run, discovered an untapped pay zone only 100 feet or so beneath bottom holes. These wells are now producing 20 to 25 BPD.
79.4% of Texas oil wells produce less than ten Barrels of Oil Per Day (BOPD).
Marginal/stripper wells comprise 84 percent of (US) domestic oil wells and produce over 20 percent of all domestic oil.
This situation of available oil leases opens up opportunities for smaller companies who do not have the vast resources and working capital as the larger corporations. These projects can have a relatively small outlay of capital funds that after rework and bringing back into production can have a steady profitable income for many years.
As a standard of comparison, if a company had an oil lease with five stripper wells producing five BOPD that would be a total of 25 BOPD. If oil (WTI) sold at $50.00 per barrel then the total for the day would be $1,250.00 per day. The total for the month would be $37,500.00 – $5,000.00 (est) for Lease Operating Expense (LOE) and that would leave $32,500.00 profits (more or less). Deductions extended over time for the lease payment and rework activities would still leave a healthy profit for outlay of original costs.
There is a clear market for stripper well oil production which allows smaller companies like Powermain LLC to rework older oil wells from proven oil fields that have been abandoned or neglected or did not make economic sense for larger companies. Also when the crude oil gets to the sales point it makes no difference what kind of oil well the crude oil comes from.
At any one given time, Powermain LLC has knowledge of (and offers from) 15 to 30 oil leases for sale. These oil leases nearly always have marginal/stripper oil wells and most have infield drilling opportunities with untapped pay zones.
At this time, Powermain is interested only in Texas oil lease opportunities. Many of the oil leases which attract our attention are in the East Texas oil fields (Longview, Tyler and surrounding areas) and North Central Texas (Lubbock, Breckenridge, Abilene, Wichita Falls and surrounding areas). However, we are always open to other areas.
We are searching for investors and/or funding. If you are interested in funding our potential projects see our investors page.