Legal Definitions - stripper well

A stripper well is an oil or natural gas well that produces a very small volume of hydrocarbons per day, typically below a certain threshold established by regulatory bodies (e.g., 10 barrels of oil or 60,000 cubic feet of natural gas daily). Despite their low individual output, these wells are often kept in operation because their cumulative production can still be economically valuable, especially if operating costs are low. They represent a significant portion of older, mature oil and gas fields.

• Example 1: Maintaining Production in a Mature Field

  An independent energy company in Kansas operates a series of wells that have been producing crude oil for over 40 years. Each well now yields an average of 6 barrels of oil per day. Despite this low individual output, the company continues to operate them because the existing infrastructure is fully depreciated, and the revenue generated from the collective production of these wells, even at low volumes, covers their minimal operating costs and contributes to the company's overall income.

  This illustrates a stripper well because each well's daily production falls below the typical threshold, yet it remains economically viable to operate due to low overhead and the cumulative value of multiple such wells in a mature field.

• Example 2: Natural Gas Production for Local Markets

  In rural West Virginia, a small natural gas producer operates several wells drilled in the 1980s. One particular well now produces approximately 35,000 cubic feet of natural gas daily. While this volume is significantly less than a newly drilled well, the gas is sold directly into a local distribution network serving nearby towns. The well's operational costs are very low, making its continued operation profitable, even at this reduced output.

  This example demonstrates a natural gas stripper well, showing that the concept applies to both oil and gas production, and that local market demand and low operating expenses can sustain wells with modest daily yields.

• Example 3: Extending the Life of a Depleted Reservoir

  After a major oil company ceased operations in a partially depleted oil field in North Dakota, a smaller, specialized firm acquired the remaining wells. These wells, now producing an average of 8 barrels of oil per day, are considered stripper wells. The new operator employs enhanced oil recovery techniques suitable for low-volume wells and focuses on maximizing the remaining recoverable oil, extending the productive life of the reservoir for several more years before final abandonment.

  This scenario highlights how stripper wells play a crucial role in maximizing resource recovery from aging fields, often by smaller operators who can manage the lower production volumes more efficiently, thereby preventing premature abandonment of valuable resources.