As early as the 16th century, explorers noted oil slicks off the coast of California. By the early 1800s, oil extracted from shale deposits was being used in medicines and as a lubricant for machinery. Refined into kerosene, it began replacing more expensive whale oil as fuel for lamps.
Most oil was extracted from water, and quantities were limited. Then, in 1869, a group of entrepreneurs decided to drill around Titusville, Pennsylvania to see if they could tap into the oil at its source. They struck oil at 69 feet, marking the first time oil was found using a drill.
The petroleum industry was born that day. It became the economic giant we know today when in 1901, two determined brothers who had nearly given up drilled the last 100 feet they could afford to into a Texas mound known as Spindletop. The 80,000-barrel-per-day gusher changed the world forever. Today, petroleum products are everywhere, from fuels to medicines to plastics.
Since that day, the demand for oil and natural gas has increased, making easy-to-find sources rarer and more difficult to find. The invention of the seismograph, a device to measure the deflection of sound waves by rock formations, was a major step forward in exploration technology. As drilling became increasingly competitive and expensive, sophisticated techniques were needed to increase the chance of making a profitable find.
Today, most exploration relies on elaborate geophysics to detect deposits. This includes magnetic and gravity surveys as well as seismic reflection analysis to detect large-scale features of interest. If the geology looks promising, recently-developed sophisticated four-dimensional seismology is used to create a profile of the subsurface structures. All of these predictive analyses are run before an exploratory well is even dug, reducing the likelihood of digging an expensive dry hole.
Even with these advanced exploration techniques, oil exploration is an expensive proposition. Small, dry-land wells cost $100,000 and up, and offshore wells or wells in remote, hard-to-access areas can run $100 million or more.
That’s why it’s important to invest in high-quality oil and gas properties that offer excellent values for both institutions and individual investors. The oil and gas experts at BWAB have a long track record identifying opportunities for oil and gas investors that other companies overlook.
We invite you to visit our website, BWAB.com, to learn more about our investment strategy, philosophy, and proven record in maximizing investor returns by building value at the field level through capital reinvestment, operational improvements and enhanced recovery and cost control.