Valuation of Properties in the Bradford District
- L.S. Panyity (Petroleum geologist and valuation engineer)
- Document ID
- Society of Petroleum Engineers
- Transactions of the AIME
- Publication Date
- December 1926
- Document Type
- Journal Paper
- 235 - 240
- 1926. Original copyright American Institute of Mining, Metallurgical, and Petroleum Engineers, Inc. Copyright has expired.
- 2.4.3 Sand/Solids Control, 5.4.1 Waterflooding, 1.2.3 Rock properties, 1.1 Well Planning, 1.6 Drilling Operations, 5.1.1 Exploration, Development, Structural Geology
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The production of oil by natural methods in the Bradford, Pa., and Bolivar,N.Y., oil fields has declined to such small proportions that under thoseconditions operating in these fields would no longer be profitable. However,with the water-flood method of rejuvenation there is available an additional2000 to 14,000 bbl of oil per acre. Naturally, there is an increase in thevalue of properties that are believed to be in the flood zone. Properties thathave been purchased some years ago for their salvage value are today changinghands at $1000 to $4000 per acre.
A lease coming under the classification of flood property differs from anatural producing property in that it is to be treated more like a mining ormanufacturing proposition. The old wells and the information from them servethe same purpose that the diamond drill does for the coal or metal miner. Pastproduction gives an idea of the area that may be benefited by flooding, andthus some of the hazards of the oil producing business are minimized.
There are both royalty and fee properties to be valued. In valuation thefollowing are the chief items to be considered:
Condition of Sand. - Thickness of the formation is not necessarily indicationof great value. Some of the best results have been obtained where the sandaverages between 25 to 35 ft. in the Bradford sand and 15 to 25 ft. in theRichburg sand, which are the two main producing horizons. Sand thicknesses areknown to be as much as 115 ft., but such thicknesses frequently cause troubleowing to the fact that there is a possibility of portions of the sand beingmore porous or of different texture, which would tend to take the water andcause a different rate of flow through such portions without beneficial effectsfrom the rest of the sand. Sometimes a former gas streak or, high up on thestructure, considerable gas may yet remain in the sand, and such streaks maytake all the water, or the present gas may prevent the entrance of water intothe sand. These evils are combatted by placing the packer below such streaks,and in some places attempts are made to shut off the undesirable portions. Thearea of thick sand is fairly well known, and the structure of the formationwill indicate the "highs" where gas accumulations may be looked for.Such places are more desirable for gas-flooding than for water-flooding.
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