Hi Mr. K —
Yes, I think you are missing something. Major oil companies drill where they are fairly certain there will be oil/gas. They just don’t plop down a rig and start drilling. That is for wildcatters. Oil companies (Devon, in particular) has a 97% success rate. All/most of the majors do as well. A person can’t punch a hole in the ground and hope for oil. I haven’t seen cost figures on this well, but my limited experience is that the consortium of companies has probably expended North of $15 Million to find the pool. Completion costs will equal, or surpass that amount. It will be years before they get a payback.
That is why companies don’t just drop a string of drill pipe anywhere.
I hope this was helpful. I am willing to be corrected by fellow FReepers with more experience than my small well at 12,000 feet on dry land.
Gwjack
Figure $1Million/hour for rig time for a deep water rig and all their personnel. 4 weeks = $672M
Sonic work prior and during with boats at ~ $2M once crew time is figured in.
Logging that deep a hole will run you easily $1M for one run with multiple tools - or at least when I logged for a few years in the 90s. Deepest I went was 26Kft and that was a nasty job that I fried a bunch of tools on.
But that’s a huge band of oil the most I saw was something like 50 ft.
Yes, you are missing something. There is a magic temperature window for liquid hydrocarbons to exist. Too hot and the liquids are cooked to almost clinker and if you are lucky just leave gas. Too cold and all you have is kerogin and not enough heat in the kitchen to produce hydrocarbons in either liquid or gaseous form.
The indication of the magic temperature window is measured by what is called the vitronite reflectance level.
The GoM and other salt basins that are similar, like Brazil, are unique in having a hydrocarbon temperature and more importantly a liquid hydrocarbon window that is exceptionally deep because they are relatively cool. Salt and the insulating properties of that and the deep water make this possible. The temperature at the sea floor is pretty close to freezing. Temperature in the earth increases from that point at about 1 degree or so per 100’. There could be liquid hydrocarbons in the GoM as deep as 40,000 below sea level.
On land the liquid hydrocarbon window is exceeded at much lesser depths than in the GoM.
$15 million is only a good start on the actual cost.
Yes, I’ve done accounting for people that invested large sums to drill where they were fairly certain there was oil, and lost their investment because there was none. When Obama gets up and says the greedy oil companies already have permits to drill on so much federal land but won’t, what his followers don’t understand is that the oil companies aren’t going to invest in drilling somewhere unless they’re fairly certain there’s oil there.