How To Read an Oil Drilling Permit

Since starting this blog, I have learned a lot about the drilling industry in North Dakota. I probably now know about 1.5 percent of all that I have yet to learn about the industry, up from one percent a year ago.

I am reminded of that because when I started this, I did not know how to interpret the 25-word summary of an oil drilling permit issued by the North Dakota Industrial Commission. (I define a "word" as an alphanumeric entity with a space on either side. The legal description of a well, with all the hyphens, is a very long word, by this definition.)

I can now interpret them, but there are still nuances in each of those permits, many of which I don't catch, and many I probably don't even know exist.

There are three terms that describe where an oil well will be drilled in relation to an existing spaced oil field: development, extension and wildcat. A development well is a well that is drilled within a designated spaced oil field. An extension well is a well that is drilled within a mile of a designated spaced oil field. A wildcat is a well to be drilled outside and not not near a designated spaced oil field.

I bring that up because at one time I only cared about "wildcats." Actually,except for "wildcats," I never paid any attention to where the well was located in relation to an existing oil field. Not so much any more. I now find all three terms equally interesting as we start to see multiple wells in one section. One could almost argue "we" need to add more terms to select from for this part of the description. I can think of "infill" and "wing" as examples.

Last month, the Minot Daily News had a nice article on how to interpret oil drilling permits.

This is also linked on my FAQs tab at the top of the blog site.

With a few more abbreviations in an oil drilling permit, one might be able to get the critical information down to 140 characters, suitable for twittering.