Pennsylvania’s proved natural gas reserves rose 90% in 2011, contributing 41% to the overall US increase, according to a new report by the Energy Information Administration (EIA), but while this shale gas boom loves Pennsylvania, some small producers are getting back to the oil basics—eschewing new exploration to refocus on the light oil that’s been around for a while.
It was back in the 60s and 70s that Quaker State Oil discovered and developed the first major oil plays in northwest Pennsylvania, and now these play are being fitted with new wells with a 100% success rate.
The old Quaker fields have engendered a theory that while everyone else is busy with shale, advanced drilling technology could be unlocking hydrocarbons in old fields without expensive exploratory drilling.
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For some smaller producers, or even the supermajors who have taken a beating with their second-quarter earnings reports, getting back to the basics might help a bit of a turnaround.
Canadian-based Enertopia Corp (ENRT) is hoping for a turnaround of this nature. The company is getting in on the largesse of drilling in light oil locations in this historic Quaker Oil territory, transitioning into light oil production without risking on exploration.
In late July, Enertopia signed a letter of intent for development drilling of up to 100 light oil-producing wells in Pennsylvania, and each shallow oil well could hold up to four separate producing sand intervals.
So far, 42 wells have been drilled and outfitted for commercial production, and another 9 wells can be expected over the coming weeks, according to a company press release.
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"This light oil project once drilled, looks to provide a strong and stable cash flow base and gives our company the ability to grow dramatically through the drill bit,” Enertopia President Robert McAllister said in a statement.
But there is another aspect drawing people in to Pennsylvania, and to the east coast in general—crude oil prices.
Light, sweet crude that originates in the east or southeast can fetch higher prices than from the west, or in comparison to Canada’s heavy oil.
By. Charles Kennedy of Oilprice.com