“The small operators of the stripper wells are pretty resilient.” Mike Cantrell
Times are tough for some of the independent oil and gas operators in Oklahoma and elsewhere across the country because of the major drop in energy prices. But they are even tougher for the “stripper well” operators, according to a recent report by Reuters.
Mike Cantrell, head of the National Stripper Well Association was one of those interviewed.
“The small operators of the stripper wells are pretty resilient,” he said. “They’ve always made it through and will still make it through.”
The number of stripper wells nationally total about 400,000 which represents more than a tenth of U.S. oil output. The ‘strippers’ are wells that pump no more than 15 barrels of oil a day.
Darlene Wallace is one of those operators in Oklahoma and told Reuters she has shut in four of her 25 wells in the state and also cut about a third of production. Wallace inherited her company Columbus Oil more than a decade ago when her husband died. She’s cut expenses by eliminating a postage machine and even asked her three employees to cover 20 percent of their health insurance.
“I hate to do that to my employees, but we’re all going to have to cut back,” she said, explaining that the health insurance move could save her nearly $10,000 a year.
For many “stripper operators” the longer prices remain below $40 a barrel, the harder it will be to keep pumping. Some admit they might have to shut more wells based on costs for labor, maintenance and electricity. Others have already cut production to conserve cash.
But shutting down “stripper” wells also carries a risk due to regulations in each state. In Texas, idling a well 60 to 90 days could result in the operator losing the lease.
Read entire article from Reuters.