This may not be the easiest and cheapest thing to do for most people; but, in a few steps, anyone who has the resources and the desire can do it and make a lot of money (and we all know that!). So here are a few steps needed to drill a well in order to extract oil or gas.
1. Find where the oil is
As we warned, this is easier said than done. It requires an experienced geologist – one who is well-acquainted with petrology, in particular – to know where the stash can be found. It is literally a treasure hunt, if you wish to see it that way. You cannot simply use a divining stick or some mystical process to discover the location. It requires high-tech tools and a lot of exploratory surveys and drillings before one can truly evaluate the nature of the deposit. And then, you will have to determine how much volume the deposit can produce in order to be commercially viable to extract.
2. Rent a drill rig
A drill rig can run up to about $100,000-Millions for each day of use. Nothing comes cheap in this big-time industry! But before you quit, you can consider looking for a partner who will be eager to cover the cost for you. Plus, there could be rig owners who might be interested to partner with and might be open to some concessions on the rental price or a cut in the business. For that, you can call on TEG for some investment consultancy help.
3. Drill a well hole
Some wells will take two months to complete at a rough cost of $15 million, including the well casing. This should give you an idea as to what exactly you are entering into before you finally go for it. Until you see what is underneath, you cannot have a clear picture of what you will be getting. As in most business ventures, the risks are real; but the rewards can be high for such high stakes industries as oil and gas exploration and production.
4. Run casing and concrete-lining
This step involves protecting the well hole with a steel casing that is surrounded with poured concrete in order to provide stability, prevent contamination as well as avoid affecting freshwater aquifers nearby. The casing is often made up of decreasing series of pipes which are connected with couplings until you go down to the 4.5-inch production liner which is what extracts and conveys the raw oil and gas from their source underneath.
5. Run the completion
This final step involves completing the well at an estimated cost of another $15 million. This requires installing a hundred or more pieces of equipment into the production liner in order to implement the whole project and begin extracting and producing oil and gas.
Drilling oil and gas is both an expensive science and art and, in most cases, very much like a game of cards which requires a lot of luck to make a winning. But there are a few adventurers out there who would rather bet their money on the prospect of hitting oil instead of toppling casino operators at their game.
Just a reminder though for beginners: Drilling does not guarantee barrels of “black gold” flowing out of your production liners. With the increasing understanding of oil exploration processes and the available technology to support them, however, the success rate of hitting oil has greatly increased. A 50-50 chance is considered a good-enough measure for many to go ahead and drill. Many a gambler has risked body and soul on lesser odds. But as we said, lady luck plays a big role in this “high stakes game”. The best bet is to forget the odds entirely. Sensational and extraordinary things do come for those upon whom the unpredictable “lady of the well” smiles.