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As Alberta’s oilfields continue to age and some companies struggle to produce under difficult financial conditions, the number of inactive wells in the province continue to be an important part of our energy landscape. Tracking the changes to the number of wells added and removed from this list can be a helpful indicator of the health of the industry and can help drive liability decision-making.
In general, a well in Alberta is deemed “inactive” if it has no reported volumetric activity for 12 consecutive months. AER’s definitions of inactive are in place to help prioritize wells requiring attention, considering both volumetric activity and H2S content. For more on these definitions, refer to Directive 013 from the AER. We wanted to take a six-month look at how this list has changed in that time.
In the past half year, 5492 well licenses were added to the Inactive Well List. There are a number of reasons why a well could be added to the Inactive List, whether they are temporary economic shut ins or if they’re on their way to being abandoned and reclaimed.
Of the 1905 of well licenses removed from the list, about one third were reactivated. We thought it would be interesting to look at the most current month in the data set (September 2020), and view production and producing hours. Here’s how that breaks down:
Production on these 600 or so reactivated licenses was just over 31,000 BOE per day, with average producing hours for the past 3 months at 348.54 hours.
The other two-thirds of the list to leave the Inactive Well list were given abandoned status. Two wells have received reclamation certificates.
This information was compiled from the data available in XI’s AssetBook ARO module, which allows you to monitor and optimize liabilities from initial deal right through to abandonment and reclamation. For those who don’t require the full capabilities of AssetSuite, we’ve created a new report purpose-built for service companies. Click here to learn more about our new InactiveLiability Report. To learn how these products can help you navigate inactive wells and liabilities, contact us for a demo.