Now That’s a great reason to drill!
To Moiko: Don’t act like it is stupid to say fish like the oil platforms, they actually do, if you have ever been offshore fishing around one you would know that there is great fishing there.
To the Asker: This is an absurd reason for drilling offshore for oil, but this question has no place in the fish section, you need to go in the politics section and discuss this there.
MFK
Gas is lighter than oil which is lighter than water, so it is typical in an oil reservoir to have all three, with the gas on top and the water on the bottom. When a well is first sunk it produces mostly oil, but with age it starts producing more and more water, that’s called the "water cut" or the fraction of fluids that are water. In Saudi Arabia they use seawater injection in many fields to drive the oil up to the wells, so they often end up producing salt water along with the oil. They have separation areas that remove and recycle the water. Eventually it does not pay to separate them because there is too much water and then the well is shut down.
Since oil is non-renewable, and the world is using very much of it, when will it run out? Any time soon?
There is a lot of information on the net.
see: http://en.wikipedia.org/wiki/Oil_reserves
and the section called "Proven reserves in order".
That will give you a ball park figure.
Amen to that brother! Remeber the indians who didn’t want to be moved to Oklahoma reservations, and then found out they were on a sea of oil? They quickly adopted the ‘Oklahoma is O.K.’ slogan.
Only about 20% of exploratory wells drilled in geologically favorable locations yield commercially viable quantities of oil. Suppose four wells are independently drilled in favourable locaions.
What is the probability at least two wells will yield oil?
the answer given in the text book is 0.1808
Set up the binomial distribution with:
n = 4
p = .20
(1-p) = .80
We are trying to find P(X>=2) which is P(2) + P(3) + P(4), or we can take a shortcut and find [1 – (P(0) + P(1)) using the laws of probability.
P(0) = n!/((n-x)!) p^x (1-p)^(n-x)
P(0) = 4×3x2/(4×3x2) (0.2)^0 (0.8)^4 = 0.4096
P(1) = 4×3x2/3×2 (0.2)^1 (0.8)^3 = 0.4096
1 – (0.4096 + 0.4096) = 0.1808
Only about 20% of exploratory wells drilled in geologically favorable locations yield commercially viable quantities of oil. Suppose four wells are independently drilled in favourable locaions.
What is the probability at least two wells will yield oil?
the answer given in the text book is 0.1808
Set up the binomial distribution with:
n = 4
p = .20
(1-p) = .80
We are trying to find P(X>=2) which is P(2) + P(3) + P(4), or we can take a shortcut and find [1 – (P(0) + P(1)) using the laws of probability.
P(0) = n!/((n-x)!) p^x (1-p)^(n-x)
P(0) = 4×3x2/(4×3x2) (0.2)^0 (0.8)^4 = 0.4096
P(1) = 4×3x2/3×2 (0.2)^1 (0.8)^3 = 0.4096
1 – (0.4096 + 0.4096) = 0.1808
I have "interest" in 2 natural gas wells. The investment in minimal, but still I know somewhere/ somehow I can deduct all or part on my taxes, but don’t know how. Also, I invested in one last year and only reported the income, not the expense, can I now do it this year for last year’s investment? All help is WONDERFUL! Thanks!
You don’t generally deduct investments. You pay taxes on the income that they generate. There are special treatments for oil and gas wells but you’d be well advised to seek professional assistance (CPA or tax attorney, not Block or Hewitt) as the rules are complex.
If this is for tax year 2005, you must file an amended return on Form 1040X.
I have "interest" in 2 natural gas wells. The investment in minimal, but still I know somewhere/ somehow I can deduct all or part on my taxes, but don’t know how. Also, I invested in one last year and only reported the income, not the expense, can I now do it this year for last year’s investment? All help is WONDERFUL! Thanks!
You don’t generally deduct investments. You pay taxes on the income that they generate. There are special treatments for oil and gas wells but you’d be well advised to seek professional assistance (CPA or tax attorney, not Block or Hewitt) as the rules are complex.
If this is for tax year 2005, you must file an amended return on Form 1040X.
2 things to take in considerations :
1/ The risk of collision when drilling another well. Usually each company has its own rules of safety. The location of a well is known within a certain uncertainty cone, at the surface one is pretty sure of the position and the uncertainty is increasing with the depth. So one must take care of this uncertainty.
2/ The physical and geometrical properties of the reservoir rock containing the oil are conditioning the spacing of your well. These properties are mainly :
- Porosity : the percentage of void within a given volume of rock, the larger the porosity the more oil it might contains.
- Type of porosity : are the pore connected together ?
- Permeability : the ability of rock to transmit fluids through pore spaces
- Saturation : percentage of oil/water within a reservoir
- Oil viscosity
- Number of compartiments : your fields might be broken in pieces a bit like a cake
etc, etc….
The spacing unit is usually a multiple of 100 m, meaning you can have one well every 100 m (quite unlikely or at least only in some section of the field) to km.
The discovery of oil transformed the world, suddenly there was a cheap alternative to coal, the industrial revolution went into gear. Now we are only a few years away from the end of that oil, the world will transformed once more, this time for the worse.