Tracking Inventory In Oil & Gas Production

Most of the equipment you handle and components you use on an oil lease fall under the general heading of materials. That includes spare parts, pipes in storage, and chemicals that are stored on the lease. All of that stuff has to be recorded and while taking inventory isn’t fun, it is an important part of making sure a business is financially stable.

Inventory

A pumper working on a lease will usually be somewhat responsible for the materials that get used in the course of a workday, so it all has to be kept track of and counted. A pumper will also usually be responsible for materials that are stored on a lease, particularly if they go missing; theft can be a serious problem. Materials need to be easily accessible, securely stored, and reasonably organized.

All of the tracking and accounting is made possible by accurate and meticulous recordkeeping. Each type of material is usually tracked in its own set of records which requires a specific set of information. The recordkeeping needs will usually vary from well to well, from lease to lease, and from company to company.

 

Storing Materials

While most materials are usually kept in a central location, there is often a certain amount of stuff that gets stored on the lease. There’s a few reasons for that. The central storage location may be in a town or other municipality, and believe it or not the materials stored in those locations can be subject to additional taxes. It’s also usually useful to have at least some stuff handy in the case of an emergency or to save on the cost of transportation. It’s not unusual to have spare rods, pony rods, and tubing on hand. It’s obviously not too useful to store fuses at the company’s office, so there’s usually a supply at the lease. Older equipment being removed or new equipment to replace it might be held temporarily at a location, as will ladders, walkways, and other infrastructure before it’s put in place. It’s not unusual to have a bit of everything handy.

All this stuff will usually be stored in a fenced and locked part of the lease. This area will need to be prepared to keep the equipment stored there in good condition. It may include a small doghouse for storage of more sensitive equipment or as a place to fill out paperwork out of the weather. The fenced-in area will need to be large enough for a truck to enter, deliver its load, turn around, and drive out.

Among other things, it’s important to keep weeds and plants from growing, as they can lead to a variety of problems. The lack of plants means that mud can be a problem if there aren’t any preventative measures taken. Crushed rock is used to address both problems. The yard itself should also be placed to prevent issues with drainage and other problems.

Some material may need to be stored off the ground. This will usually include engines and other delicate equipment. Concrete slabs or wooden slabs may be used. A roofed truck dock is great for handling larger and heavier material. All engines and other equipment should be winterized when they are put into storage. ‘Winterization’ means to drain fluids and seal openings to prevent damage from weather, which will probably need to be done no matter the season. Rain, in particular, can cause rust and valve damage.

The storage area should be well organized to make everything easy to find. A plan of the storage area is helpful, with all the material marked down. Equipment racks and storage should be labeled and marked clearly so that everything is easy to find; some sort of plan where everything is numbered in order usually works best. Everything should be recorded as soon as it’s brought to the storage area. If inventory isn’t tracked, it’s much more likely to go missing.

When it’s been decided that material is no longer useable on the lease, it can be downgraded to either junk or scrap. These are terms that have specific meanings: scrap is not repairable and has essentially no useful parts, while junk isn’t usable but may still have some useful parts or pieces. Junk might be held onto so that it can be worked over for spares. Either junk or scrap could be sold at auction. It all has a value, even if only a small amount, and so junk and scrap need to be tracked as well.

 

Pipe Storage

Pipes and rods will normally be stored on the lease, as waiting for replacements can cause a significant amount of well downtime when it’s not producing. Pipes are rated according to the quality of the steel and the depth they’re rated to. The lowest rating, for example, is H-40, followed by J-55. The pipe will be stamped with it’s original rating. However, the pipe’s rating may change; when used pipe is removed from the well but is still in decent shape, its quality will be downgraded one step and it may be put to some other use. For example, a joint of J-55 piping will be downgraded to H-40. This change in rating is not marked on the pipe itself, but only in the materials records. The recorded rating should be trusted over the rating stamped on the pipe.

Inventory

Figure 1. A rack for storing pipe at a lease location.

Pipes are stored in racks, which need to be designed to be large and strong enough to hold the lengths of pipe that are going to be used. The racks are also usually placed so that the pipes are oriented north-and-south when stored. It’s believed that this can prevent or slow the re-crystallization of the pipes, which can impact its strength. It’s also helpful if the pipe rack is built so that the pipe can be easily rolled on and off a truck.

Pipe and rods can be stacked in layers with strips of wood used to separate each layer. A wooden block can be nailed on the board to prevent pipe from rolling off the rack unexpectedly. Pipe should be even and neat when stored in racks. It also should be collared, and the threads should be cleaned and covered with thread protectors. It’s common to store pipe and rod joints by length, with lengths coming in different ranges. In range 1 are pipes 30 to 35 feet in length. In range 2 are pipes 35 to 40 feet long. Range 3 includes pipes from 40 to 45 feet long.

 

Chemical Storage

Chemicals are usually expensive and can be dangerous, so it’s essential that they are always clearly identified. They usually come in drums that hold 55 gallons, which should be marked with the contents and the date the chemical arrived at the storage location.

Inventory

Figure 2. It’s important that chemicals are stored correctly and disposed of when they are no longer needed.

There are a few requirements and common practices that should be followed when marking chemicals. The markings should be at least 1 inch high and spaced so that they are easy to read. The markings can be specific to the chemical or just be a general category. For example, chemicals used to treat oil could be marked with an O, solvent for clearing paraffin can be marked with an S, and so on.

The inventory of chemicals should also always be kept up to date. Accurately tracking the amount of chemicals on hand also allows you to anticipate when more will be needed. Misplacing or misidentifying chemicals can lead to serious problems. Not only can it lead to unsafe handling, it can also be costly to identify chemicals so they can be disposed of correctly.  

Chemicals should be inventoried regularly so that the amount used in the preceding month can be calculated. With that information, it’s possible to estimate chemical usage over time. Each 55 gallon should be counted, and partly full barrels should be measured and accounted for as well. There are charts that allow you to convert depth gauged in a barrel to volume of fluid.

Details about the chemical should be noted in records, including the name, purpose, instructions for use, and how long it can be stored.

 

Inventorying And Moving Stored Materials

It’s likely that materials will be moved on and off the lease with some regularity. Projects will need specific equipment that has to be brought to the lease, counted, and stored, with each step being recorded. It’s not unusual for extra material to be brought for each project. When the project is completed, this also has to be counted up and either sent back to central storage or held on the lease.

A materials transfer sheet is needed whenever materials are moved. When pipes are being moved, a pipe tally sheet will also be needed. Both of these will have some specific fields that need to be filled out. It’s not unlikely that there won’t be a field for an important piece of information, or that there isn’t space to write everything. It’s common practice, in that case, to write ‘OVER’ on the front of the sheet and then add whatever notes are needed to the back. An example of information that’s important to note includes the downgrading of pipe, specifics about storage, or handling instructions. As usual, it’s better to offer too much information than too little.

In some cases, material may be owned as part of a joint venture with another company. This equipment has to be handled carefully. Though some piece of jointly owned equipment may be just the answer you need to a problem, it will usually have restrictions regarding its use; jointly owned equipment is usually reserved for the joint venture. This material has to be carefully kept track of and it should always be clear, both by sight and in the records, what material is jointly owned.

Is your appetite for oil & gas operating knowledge insatiable like ours? 😀 If so, check out these related articles: The Basics Of Keeping Records For Oil & Gas ProductionWell Records For Oil & Gas Production and, Operational Records For Oil & Gas Production Wells – they’ll be sure to pump you up!!!

Operational Records For Oil & Gas Production Wells

With the amount of paperwork that is required around the lease, it can sometimes seem like pumpers are actually bookkeepers who spend a lot of time outside. Just about everything that is done around a lease ends up getting noted down and recorded somewhere. It’s all important stuff and is used frequently to make important decisions about equipment and production schedules.

Records

While on many leases records are kept on electronically, not every well has a high enough production to warrant those kind of upgrades. Paper records are therefore still fairly common. In either case, the same measurements are required.

 

Operation Records

Oil production is often where most of the attention goes, and rightfully so; that’s what drives the business and provides the income that pays for everything else. Production records can also be used to diagnose problems, prevent problems before they get serious, and see some issues coming so they can be avoided entirely. Having the production records at hand can often answer a number of on-the-spot questions.

The other records that are kept shouldn’t be discounted, however. A substantial amount of money will be sunk into equipment, maintenance, and labor. Proper records will track all that and highlight where money can be saved and operations streamlined. Some of the other records kept around the lease include:

  • Consumption of chemicals: It’s difficult to express chemical consumption in a simple dollar amount. Chemicals can be added to oil that’s not sold until the next month. That means the cost of chemicals consumed can’t be compared directly to the oil sold. However, comparing to the average daily production gives a workable estimate.
  • Supply expenses: Some companies will allow pumpers to spend a certain amount without needing approval, as long as it’s recorded. For larger purchases, there is usually an approval process that requires paperwork.
  • Time sheets: Recording the hours you worked is obviously important if you want to get paid. Time sheets are kept both for company employees. There is also usually some sort of time keeping paperwork for contract labor. Pumpers working for the company may sometimes need to confirm the amount of work down by contract labor; accuracy is always important.

Other records may include readings for all meters, vehicle mileage and fuel, and details of spills and other problems around the lease.

 

Production Records

Production amounts will often be sent to the leasing company’s office over the phone or by electronic means. Paper records are also required in many cases. In the past, 7-day production reports were common, but have been replaced by 8-day reports to save on paperwork a bit. Monthly reports are also required to give an overview of production.

Records

Figure 1. An example of the commonly used 8-day report.

The 8-day report is a daily record of production that also shows the results of well tests, lists problems, and other information. It can be helpful to consult it each day to have a reference to compare the day’s production against. The report should always be double checked before it’s submitted, as it’s important that it is accurate. 8-day reports are usually submitted on the 1st, 9th, 17th, and 25th of each month.

Gas production is usually tracked and reported automatically by a meter, so it’s usually not part of the daily report. Gas production will usually be measured as part of the monthly well tests, however, when a chart record may need to be made.

Production is also recorded in the monthly tank battery production record. The total production of oil, water, and gas for the month is listed. It is then divided by the number of days to give a daily average. Comparing daily averages from month to month is a good way to get a sense of production changes over time.

Records

Figure 2. This tank chart is used to convert gauged depth to volume of liquid. The tank is cone-bottomed and contains 3.83 brls of oil.

The tests are done on the same day each month. When a single well feeds to a single battery, one day can be the monthly ‘test day,’ when the well and battery can be tested.  These figures are usually recorded on custom tables made for each well. The sheet will usually record the lease, well number, the date, how long the well was produced, and the amount of oil produced. Other details are recorded according to the needs of the particular well. As a rule, it’s better to include too much information than not enough.

Is your appetite for oil & gas operating knowledge insatiable like ours? 😀 If so, check out these related articles: The Basics Of Keeping Records For Oil & Gas Production, Well Records For Oil & Gas Production and, Tracking Inventory In Oil & Gas Production – they’ll be sure to pump you up!!!

Well Records For Oil & Gas Production

Well records provide a history of a well, its equipment, and what it has produced. With a full set of well records in hand, it’s often possible to make rough predictions about how a well will act in the future, when equipment will need to be replaced, and how to best operate the well. That makes accurate and up-to-date well records essential.

Well Records

While the official records will usually be maintained by the producing company, it can be helpful to get a general idea of the information contained within the well records and how it can be used.

 

Well Records

While the official records will be kept by the producing company, it’s usually a good idea for the pumper working a well to keep a record of their own. Together with regular visits, these records can be used to get a unique feel for what’s happening with a well. It’s also usually possible to get a look at the official records of the well you work on, for a fuller look at its history and behavior.

An example well pulling record.

Date Lease Well ID Pulled Tubing Pulled Rods Pump replaced Pump length Pump dia. Notes
2-21-11 Thomas 1 X X 1 1/8 12 ft 4 inches Pump valve worn out
5-4-12 Thomas 6 X X 1 1/4 13 ft 4 inches Holed tubing

 

Drilling Records

It’s rare that a pumper is involved with the drilling of a well. Looking at drilling records can be helpful, however, as it helps to see how a well has changed over time. The drilling record will contain information about the well’s completion, as well as the volumes of oil, water, and gas produced. It will also provide basic information about the well, such as the depth and diameter of the casing, and specifics about casing perforations. It will also be updated with any changes made to the well that could affect production.

 

Wellhead And Pumping Unit Records

Information about the wellhead and pumping unit may be critical in many situations. These records will contain information like the manufacturer of the pumping unit and records of service. It will also contain some information that can be helpful in day-to-day operations, such as the direction of the pumping unit’s rotation, stroke length, strokes per minute, and more.

Wellhead records will provide information about all the wellhead equipment and components that are visible, and which a pumper may have to service or monitor. Wellhead problems tend to be emergencies, and it’s usually helpful to have the necessary information at hand and easily accessible. Pulling tubing or rods and other maintenance involving the wellhead can often be expensive and have an impact on production. The wellhead records will include information such as the length of polished rods and the size of the rod liner, sizes for various gaskets used, stuffing and packing information, and details on other components.

 

Casing And Tubing String Records

Careful casing and tubing records are essential, as the diameter of the casing and tubing string will affect every piece of equipment in one way or another. The height of casing perforations will also affect the placement of tubing perforations, and therefore the length of the rod string. Most companies will have specific policies regarding the placement of the tubing perforations relative to the casing perforations. The number and placement of perforations can also be important information. If the well is ever worked over and the casing perforations are changed, that information will also be recorded in the casing records.

Detailed information about the tubing string will be found in the tubing records. These records will list the length of every joint of tubing as well as the quality of the joints. It will also list information about hold downs that may be used with the tubing string, including how to release them. Details about packers used with the string will also be listed in the tubing records. A pumper will most often have to update the description and count of the tubing string and maintenance records.

Those records should be exact. Each joint should be listed in the order it is run into the whole. Once the tubing string has been run downhole, the tubing joints will need to be listed in reverse order. In other words, they need to be listed from the top down so that they can be tracked as the string is pulled in the future.

There’s a couple of different ways to measure tubing joints. It’s likely that the pumping company has a particular method that they’ll want to use consistently across all wells. Tubing joints can be measured including the threading, not including the threading, or from the top of one collar to the next. The last method is the most accurate, but the joint does have to be lifted off the slips in order for it to be measured that way. The threading of a joint is about 1 ½ inches long, and most often joints are measured with the threads included. If either of the first two methods are used, the difference is fairly easy to figure out. For example, if the joints are measured including threading and there are 100 joints in the well, the tubing perforations will actually be 15 feet higher than the calculated length.

The tubing records will also contain details about a holddown at the bottom of the tubing string. Tubing strings might have a holddown at the bottom to reduce the amount of ‘breathing,’ or stretching and contracting. Tubing strings can have tens of thousands of pounds of pressure on them, which is important to know before attempting to pull the string.

 

Sucker Rod Records

Sucker rods are in just a few standard lengths, of 25 ft, 35 ft, and 37 ½ ft. That makes recording specifics about the rod string a little bit easier than it is to describe a tubing string. You can simply write down the number of each length in the order they were sent into the hole. Rods will generally stretch after some use, so the recorded length is only an approximation in any case.

The rod string records will also record specifics of the downhole pump. The length of the new pump’s stroke is recorded and compared to the old pump. Recording the date of each pump replacement is obviously important; among other things it can be used to predict when a new pump will be needed. Keeping track of a pump’s life can also help rule out some problems; if the pump usually lasts for a few years and it was just replaced a few months ago, it’s not likely to be the cause of current production problems. A good record can also help identify chronic problems that can be addressed, extending the life of the pump and other components.

 

Electrical Equipment Records

Information about the electrical systems around the lease may have their own records, or they may be included with the motor or prime mover they’re associated with. It’s usually a good idea to record as much detail about fuses, motors, and control boxes as possible, particularly if you’re not too knowledgeable about electrical systems or automation. Those are usually worked on by specialists, but it can usually be helpful to be able to provide them with some basic information before they arrive on site. That information can include fuse ratings and size, types of time clock, safety breakers, and style of control box.

Is your appetite for oil & gas operating knowledge insatiable like ours? 😀 If so, check out these related articles: The Basics Of Keeping Records For Oil & Gas ProductionOperational Records For Oil & Gas Production Wells and, Tracking Inventory In Oil & Gas Production – they’ll be sure to pump you up!!!

The Basics Of Keeping Records For Oil & Gas Production

Some recordkeeping is required, either by a regulatory body or the lease company. They’re used to monitor production and help to understand the well’s behavior. Other records you might keep for yourself, and might include tips for the next time you have to perform a difficult task, or details that you’re likely to forget.

The record might be a notebook in your truck’s glove compartment, but these days it’s more likely to be an app on your phone. In either case, a good record is an important tool, as useful as a wrench or screwdriver.

Recordkeeping

 

Why Keep Records?

Daily recordkeeping can often seem like just another chore, more red tape to wade through while doing your job. In reality, accurate and precise recordkeeping is an important part of a lease pumper’s responsibilities. Complete records can be used to spot potential problems, increase efficiency, and predict when expensive maintenance may be required. That all can add up to money saved.

For the folks on the ground doing the work, records can also be of direct, practical help. If there is ever a question about what type of packing material or which sort of oil to use, the answer can be found in well kept records. When ancient or unusual equipment has to be pulled or serviced, the instructions for doing so are usually found in the lease records. A few minutes jotting down notes can save you hours of headache down the line.

You’ll want to keep records of basic information like the size and locations of fuses on the lease, size and type of rod packing, location of spare equipment, and more. Records will also indicate more important information as well, such as production quantities and details about equipment. The value of good recordkeeping shouldn’t be underestimated.

 

Recordkeeping

Each pumper should set up his own record book. The needs of each well and tank battery are going to be unique, so it may be helpful to have easy access to a range of information. In some cases, the pumping company may have a mechanic or other specialists on staff who keep records of their own. The pumper’s records may be less.

The record book itself can be as simple as a notebook that has been setup to keep information organized, but it can be helpful to get a little fancier. Using a three ring binder allows you to add, remove, or rearrange pages, and using section dividers or tabs can help to keep different types of records separate. Blank or graph paper is often useful, as it allows you to design an efficient recordkeeping system.

Lease records will usually include pumping and production records, records of communications, maintenance records, and materials records. Materials records are inventories that outline how much of different equipment is held and where.

 

Your Greasebook

The lease record books tracks monthly testing and production, as well as the general state of equipment and maintenance records. There’s a lot of day-to-day work that doesn’t get recorded in the lease record book, though, that may be helpful to know. Your greasebook is the best place for all that information. It should be updated daily and kept handy for at least a short while. While lease records are great at providing an overall look, some questions can only be answered by detailed information that isn’t kept in the lease records. If you don’t jot it down in personal record, the answer may be gone.

Information that it may be helpful to track in your greasebook includes gauge readings, meter readings, tests completed, and any maintenance or repairs done for each day. It’s helpful to divide the greasebook so that records for each lease are kept in a separate section. There’s a few shortcuts you can use to save space in your greasebook:

  • Stock tanks are numbered, with higher numbers usually being to the right. The last two letters in the ID number for each tank should be unique. The number and the last two letters are enough to identify a tank, in most cases.
  • A new section can be added for each day. Use as much space as you need for the day, including any measurements, tests, or repairs made.
  • When a greasebook is filled, mark the dates it covers and keep it somewhere accessible.

The greasebook might record information such as the gauging amounts for each day, the amount of oil sold, water or sediment levels, chemical added, and anything else that might be useful to know. Some information in your greasebook may end up in the lease records.

Is your appetite for oil & gas operating knowledge insatiable like ours? 😀 If so, check out these related articles: Well Records For Oil & Gas Production, Operational Records For Oil & Gas Production Wells and, Tracking Inventory In Oil & Gas Production – they’ll be sure to pump you up!!!

Lease Natural Gas Systems In Oil & Gas Production

Many wells produce some amount of natural gas along with crude oil. Others may produce mostly or only natural gas. Whenever there is enough gas coming from the well to be worth collecting and selling it, additional equipment and vessels need to be added to the tank battery and wellhead. All of the equipment intended for handling gas production together is called the gas system. It begins at the separator, where gas breaks out from liquid well products.

Natural Gas Systems

 

Gas Pressure

Pressure is an important consideration in any tank battery. It forces fluid and gas through the different vessels, and helps prevents loss through evaporation. Pressure is controlled by valves, both in the gas outlet line and the water and oil outlet lines. The oil and water lines use diaphragm controlled valves to maintain backpressure. The gas line will also use a diaphragm backpressure valve. Diaphragm valves have an arrangement that uses a spring and bolt on the top to adjust the dump pressure.

Natural Gas Systems

Figure 1. A diagram of a tank battery. The gas system is labeled G.

Fluids can only flow from a higher pressure to a lower pressure vessel, so the separator will have the highest pressure of all the vessels in the tank battery, and the stock tanks will have the lowest. This pressure balance is controlled by the gas system.

Natural Gas Systems

Figure 2. The cut-away view of a backpressure valve. (courtesy of Kimray, Inc.)

Wells are usually tested regularly each month. Part of that testing is a measurement of the gas pressure and volume that is being produced. The well will typically be produced through to the tank battery so that measurements can be taken by a meter, like the one shown in Figure 3.

Natural Gas Systems

Figure 3. A meter used for testing gas pressure.

 

The High Pressure System

A gas system can be divided roughly into a high pressure system and a low pressure system. The high pressure system is not truly at a high pressure, particularly when compared to pressures downhole; the separator may be the only vessel that is part of the high pressure system. However, the separator can have a pressure of between 20 and 50 psi, which is enough to require caution.

In some cases, particularly with marginal wells, the gas produced may be a very small amount. The casing may just be left open to vent whatever gas is produced. Enough gas may remain in the fluid, however, that a separator may still be required. Other vessels that might be considered part of the high pressure system include any heater-treaters or wash tanks that may be under more than a few pounds of pressure.

 

The Low Pressure System

The low pressure system is largely made up of atmospheric tanks, such as stock tanks. Stock tanks will normally have a few ounces to a few pounds of backpressure, which helps to prevent loss by evaporation. Gas will usually flow out of the tanks’ gas outlets and from there to the vapor recovery unit, with a small amount of pressure held by a valve. Even though the pressure is quite low, a safety release valve is still necessary. A simple option that is popular is to use a length of L shaped pipe. This can be used with a diaphragm valve as a safety valve if pressure should build in the vessel.

Natural Gas Systems

Figure 4. A diagram of a backpressure valve. This one maintains one ounce of backpressure, and is designed for use with atmospheric vessels. (courtesy of Sivalls, Inc.)

The vapor recovery unit is also considered part of the low pressure system. It’s placed between the high pressure vessels and the atmospheric stock tanks, and is used to reclaim liquid hydrocarbons, usually low weight condensates, that have evaporated. These are condensed out of the gas and routed back to holding tanks. Vapor recovery units are most often required when wells are located in populated areas. One may also be useful when a heater-treater is used in a tank battery, as heat can increase loss through evaporation.

Natural Gas Systems

Figure 5. An example vapor recovery unit.

The unit is most often a skid mounted. The basic unit consists of a compressor and some sort of scrubber for removing vapor. Gas is then compressed; it’s important that as much liquid is removed as possible, as the compressor is usually intended for gas only. Liquid in the compressor can end up damaging it. The compressor is necessary as the gas is injected back into the separator; the gas has to be at a higher pressure than the separator. The liquid level in the compressor should be checked regularly. Conversely, these pumps need to be kept lubricated, as dry gas can lead to friction between compressor components.

 

Gas Sales System

Gas is collected from all of the vessels, including the separator, heater-treater, stock tanks, and any other vessels. Before the gas enters the pipeline, the gas company will measure its volume using a gas meter. There will also be a backpressure valve and check valve to prevent loss of gas.

The pipeline’s pressure will often be set quite low, below the operating pressure of the vessels in the tank battery. That allows gas to flow from the battery to the pipeline. Further down the line, there will be a compressor that pushes pipeline pressure up to 500 psi for long distance transportation.

It’s possible that more gas is produced and sent down the pipeline than the gas company is selling. When that happens, the pressure in the pipeline will grow. The result is that production at the well slows, perhaps quite a bit. Everything is still operating properly, but the pressure is such that new gas production is being sent to the gas flare to be vented, rather than down the pipeline. The only option, in these cases, may be to shut in the well for a short time.

Is your appetite for oil & gas operating knowledge insatiable like ours? 😀 If so, check out these related articles below – they’ll be sure to pump you up!!!

Selling Natural Gas In Oil & Gas Production

The system for handing off natural gas production to the purchasing company is a bit different than that required for selling crude oil. Crude oil may be transported by truck, and the tank battery will require a system to allow trucks to be loaded. When selling crude oil by pipeline, an LACT unit and other additional equipment may be needed. 

Selling Natural Gas

Selling gas also usually requires some specialized equipment. The gas needs to be compressed so that it can be transported through a pipeline. It also needs to be measured, and any remaining liquid needs to be removed. However, all that, and the equipment required, may actually be the responsibility of the purchasing company. Gas will often technically belong to the purchasing company once it leaves the production unit. However, since this is equipment that’s at the lease location, and it’s generally wise to understand how you get paid, it can be helpful to know what happens with produced natural gas before it gets sent down the pipeline.

 

Measurement and Compression

After the gas has had as much liquid removed as possible, it will usually need to be compressed. The pressure is what pushes the gas down the pipeline. If the gas pressure needed for the pipeline is over 500 psi, the gas will need to be compressed. The pressure will fall as gas travels down a pipeline, from the friction between the gas and the interior of the pipeline. Pressure will also fall as pipelines meet and the diameter widens to handle the additional volume. There will usually be compressor stations along the pipeline to keep the pressure high.

The compressor at the lease location will be automated so that production can be handled automatically. It will also have some controls to shut off the compressor in the event of a sudden change in line pressure. Both a large drop or a sudden rise can indicate a problem. A drop in pressure may indicate a leak or break in the pipeline, and so the compressor will be shut off to prevent gas being lost to the atmosphere. A rise in pressure could mean that the line has become blocked. An engine will often be used to provide power to the compressor; when that’s the case, the engine will have it’s own set of safety systems.

Selling Natural Gas

Figure 1. The gas meter is located within the small building to the left.

After the gas is compressed, the amount sold is measured by a gas meter. The meter may be as simple as a chart meter, or it may be a fancier system with solar power. These details are going to largely depend on production volume of the well. That is also going to impact the contract with the purchasing company. That can determine who owns equipment. With some low volume wells, the production company is required to pay the cost of a pipeline connection.

Selling Natural Gas

Figure 2. An example of a solar powered gas meter. Meter readings are reported to the purchasing company automatically over radio.

 

Testing Wells

The production volume is determined by testing the well.  A shut in test can determine reservoir pressure, and therefore provide some data helpful when trying to predict a well’s production volume over time. To perform this test, the well is shut in, and after a standard time period the pressure at the wellhead is read. Other tests can provide information about water and condensate production. There are a few tests that are required so that regulatory bodies can monitor gas production and set production limits.

Tests usually require a certain amount of preparation, even simple ones like the shut in test. A higher flow for a short time can help to clean the wellbore before a well is shut in. Some wells may need to be shut in for longer periods before they reach maximum pressure and tests can be run.

The procedures and equipment for measuring gas production is largely similar to measuring liquid oil. Gas volumes are usually higher, however. A few abbreviations are standard and helpful to know. Bottomhole pressure is usually written BHP. CF and CFM mean cubic feet and cubic feet per minute.

Some abbreviations will use roman numbering, which can save on space and is less likely to be misread. In roman numbers, M stands for 1,000, and MM is 1,000 x 1,000, or 1 million. 1,000 ft3 can therefore be written as MCF. MSCF is 1,000 standard cubic feet. 1 million ft3 is MMCF. MMCFD is 1 million ft3 per day. Barrels of condensate per million ft3 is abbreviated BCPMM.

 

Transporting Natural Gas By Pipeline

In natural gas production, a lot of time is spent stripping all the water and liquids out of the gas before sending it down the pipeline. Liquids in the pipeline can become a serious problem, and even small amounts are an issue. When the natural gas from a dozen wells meets in the pipeline, the small amount of liquid from each well can be enough to be problematic.

Liquid vapor will condense as it moves through a pipeline. The condensate will need to be pushed along by the gas pressure, or it will cause back pressure or blockages. Condensed water can also combine with liquid hydrocarbons and other elements precipitated out of the gas to create a compound called a hydrate, a gel-like substance that will also block the line.

Water will also freeze in colder weather, leading to more blockages. The water may freeze and thaw several times throughout the year, leading to cycles of blockages and flow. Methanol may be injected in the line to act as an anti-freeze.

Selling Natural Gas

Figure 3. An example of a gas compressor with a chemical injector for anti-freeze.

It may be inevitable that some liquid gets into the pipeline and condenses. This condensate is most often known as drip, and is usually removed from the pipeline and collected in containers known as drip pots. Drip is volatile and it should be handled carefully. If it mixes with oxygen and is ignited by a spark, it will explode.

Selling Natural Gas

Figure 4. Shown here are drain lines leading to drip pots.

Natural gas is collected at processing plants, where all liquids, condensates, and other contaminants are removed. It can then be sent where it will be used, often long distances across the country.

Selling Natural Gas

Figure 5. A processing plant for natural gas.

Natural gas has a number of different uses. As it is clean burning, it is used to provide steam to generate electricity. Compressed natural gas (CNG) can be used to power cars and short distance transportation. If it is compressed further it will become liquefied natural gas (LNG), which can also be used to fuel cars and other transportation.

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Dehydrating Natural Gas In Oil & Gas Production

When it comes out the ground, natural gas will be mixed up with other liquid or vapor hydrocarbons and water vapor. A great deal of the vapor and liquid that is caught up in the natural gas will be removed by high pressure separators. Separators are designed primarily to separate liquid from gas, though three-phase separators will also isolate liquid hydrocarbons from water. Once the natural gas has passed through a separator, however, it may still be fairly wet gas, also known as rich gas. This is gas that still contains vapor, both water and a form of liquid hydrocarbon called distillate, that needs to be removed before it can be sent to the pipeline.

Dehydrating Natural Gas

 

Dehydration Units

A dehydration unit will often be used to dry natural gas enough for it to be sold. The gas may still contain some vapor, but it will be conditioned so that its dewpoint, the temperature at which condensation forms, is lower. Some types of dehydration units may be referred to as a thermo or stack pack.

Dehydrating Natural Gas

Figure 1. A diagram outlining the operation of a glycol dehydration unit.

The gas is treated with a chemical that is hygroscopic, meaning it will absorb the water vapor in the gas. The dry gas is then measured and stored or sold. That chemical is usually either tri-ethylene glycol or ethylene glycol, with tri-ethylene glycol being more common. The dehydration unit will usually be with the separator, located together before the tank battery.

Dehydrating Natural Gas

Figure 2. Pictured together are a separator and a dehydration unit with knee tub. In the background are tanks for handling water and distillate.

A dehydration unit may consist of several different vessels. The first is the inlet scrubber, a two phase vessel which separates liquid from gas. The gas passes over a divertor plate so that it flows in a circular direction. It then passes up through a mesh mist extractor, and then on to the next vessel in the unit, the contact tower.

The gas enters the bottom of the contact tower and flows up through a series of trays. The first is called a chimney tray, and is simply a tray that is sealed on the bottom and that has a short length of pipe leading up. This allows the chimney tray to catch glycol as it falls from above. All the trays above the chimney tray will usually be bubble cap trays, each with a layer of glycol that drops down from above and flows out through the downcomers. The trays are metal sheets with dozens of holes in them. Each hole will have a small cap above a riser, so that as gas flows up it is broken up into small bubbles. This increases the surface area that is exposed to the glycol, improving the efficiency of the chemical as it draws liquid vapor from the gas. The gas then passes up out of the top of the tower.

Dehydrating Natural Gas

Figure 3. A close up of a dehydration unit.

The gas then is piped through a downcomer line and passes through the glycol-gas heat exchanger. Glycol that is entering the contact tower is usually hot after water has been boiled out; the gas is used to cool the glycol. The gas is then sent on to be measured and compressed.

Glycol is pushed through the system by a pump, and is cycled through to be used multiple times. A dual action pump pushes glycol to the top of the contact tower, so that it can flow to the bottom and absorb liquid along the way. The wet glycol collected at the bottom of the tower is pushed through a high pressure strainer and into a surge tank. It is then pushed into a separator designed to remove any gas that may have been brought along, as well as liquid hydrocarbons like condensate. The glycol, still laden with water, is next pumped to the reboiler. The gas reclaimed from the dehydration unit’s separator can be used to power the reboiler.

Glycol has a higher boiling point than water, so the glycol can be heated to boil the water off. Boiling temperature will rise or fall depending on pressure and contaminants, but reboilers generally operate at about 350 degrees Fahrenheit. This is significantly higher than water’s boiling point of 212 degrees, but just below glycol’s boiling temperature.

Dehydrating Natural Gas

Figure 4. An example of a reboiler.

Water vapor rises from the glycol and is sent through a stripping still and condenser, after which it flows down an angled pipe to a small container called a foot tub. The angled pipe will most likely need to be insulated, as the water in it can freeze in cold weather and cause a blockage.

Dehydrating Natural Gas

Figure 5. A foot tub from collecting water.

Vacuum trucks are used to empty the foot tubs so that they don’t overflow. This is a task that may be performed by the gas purchasing company.

 

Tank Batteries For Gas Wells

The tank batteries for natural gas wells are usually fairly simple. The liquid that is produced is usually made up of low weight hydrocarbons and water, which flash separate without requiring any heat or pressure. As a result, not much equipment is needed; heater-treaters, wash barrels, and other vessels a crude oil tank battery would require can be left out.

Tank batteries for gas wells do have a few special considerations. In particular, the liquid hydrocarbons that are produced will have a high API gravity, and can act as a penetrating fluid. Fittings that are even a bit loose can lead to seeping leaks. Leaking fluids will stain equipment and the installation, leading to a generally run down appearance. Keeping an installation clean is also about more than just an attractive appearance; when equipment is clean and well maintained it’s much easier to spot problems before they become serious.

Dehydrating Natural Gas

Figure 6. This is an example of a tank battery designed to serve a gas well.

Each well produces a slightly different mix of gas and liquids, so each tank battery will be different to meet specific needs. Beyond the three phase separator and dehydration unit, other vessels will usually include a tank for storing liquid hydrocarbons and a holding tank for the water disposal system.

Dehydrating Natural Gas

Figure 7. This tank is used to hold condensate produced from a gas well.

The tank used for holding liquid hydrocarbons, like condensate, may need to be more than just a simple stock tank. The liquid hydrocarbons can be extremely volatile, meaning that they will evaporate very easily. Loss through evaporation can be a significant problem, and so a higher back pressure may need to be held to reduce the evaporation. A careful record will usually show any losses.

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Separating Fluids From Natural Gas In Oil & Gas Production

Before any product from a well can be sold, it has to be separated from all the impurities and contaminants that are also brought up from the well. When the well is primarily producing natural gas, the major concern is scrubbing liquid vapor from the saleable gas. Gas purchasing companies will usually have requirements for the gas’ dryness before they will accept it. Other valuable hydrocarbons may also be produced alongside natural gas, which when separated out can be sold.

Natural Gas

As with crude oil producing wells, most of the separation happens in the tank battery. The majority of the equipment in the tank battery for a gas well will be used to remove liquid from the natural gas. Three phase separators are pretty common choices for gas producing wells; the ‘three phase’ part means that the vessel separates gas from fluid, and also separates the fluid into water and any liquid hydrocarbons. Unlike separators used with crude oil wells, these separators are usually under high pressure.

 

High Pressure Separators

A separator used for separating oil from gas is usually under, at most, 100 pounds of pressure. By comparison the separators used for gas wells are under at least 1,000 pounds of pressure, and may have a max test pressure of about 2,000 psi. To contain such a high pressure, separators chosen for a gas well are usually small, with a diameter of 2 ft or less. The construction of the separator is also usually much heavier, including thicker walls and tougher gauges and valves. As a general rule, whenever a piece of equipment is visibly stronger and more rugged it is likely to be designed to handle high pressures.

 

Vertical Separator

A common type of separator used for gas wells is a vertical separator. An example of one can be seen in Figure 1. Three phase separators are chosen frequently, as they both separate liquid from gas, but also separate water from liquid hydrocarbons.

Natural Gas

Figure 1. An example of a three phase separator that operates under high pressure.

In the example in Figure 1, the inlet line can be seen on the center-left of the separator. The gas flows up to the gas outlet at the top, where it is sent on to a scrubber, seen at the bottom right. The scrubber is shop made, and is used to remove any remaining vapor. At the upper right are safety devices, such as safety valves and rupture discs.

Liquids fall to the bottom of the separator. Liquid levels are controlled by a pair of floats, with the exterior parts of the floats being visible at the center-right of the separator. The top one is an indiscriminate float, meaning that it will float on both oil and water. It therefore controls the level of condensate, a form of lightweight, liquid hydrocarbon. When the condensate level is high enough, the diaphragm valve (the lowest line on the left) will open and allow fluid to flow to stock tanks.

The lower float is designed to float on water but fall through oil, and therefore is used to control the water level in the separator. These sorts of floats are called discriminate floats. This float controls another diaphragm valve, which when opened allows flow into the water disposal system. Figure 2 shows a closeup of these components where each is easier to see.

Natural Gas

Figure 2. A close up look at the separator and its valves from Figure 2. At left is a gas scrubber custom made in a shop.

For smaller wells that have lower production volumes, the tank battery will often be much simpler. A single separator, a tank for holding waste water, and a meter for measuring gas production may be all that is needed.

Natural Gas

Figure 3. A low production gas well.

 

Indirect Heating

Gas wells may have a pressure two or three times the operating pressure of a separator. This can cause problems when water vapor is produced from the well along with natural gas. As the gas expands in the relatively lower pressure of the separator, it will cool extremely quick. The drop in temperature will freeze the water, creating a block in the lines, usually at the choke valve of the wellhead. This will often cause production to cease. With no production and no gas expanding to lower the temperature, the ice melts. Eventually, the well begins to produce again, until ice forms once more and the cycle is repeated.

Obviously this is an inefficient way to run a well. To address the problem, a few solutions have been developed. The most common is a separator that uses the water bath that is shown in Figure 4. Gas from the well flows back and forth through a pipe surrounded by hot water. The water heats the gas, which keeps ice from forming at the choke valve. Gas then gets piped to the three stage separator, which functions much like any other separator. Gas breaks out from the fluid and is piped up the gas outlet. Water falls out to the bottom of the separator, and is drained out to the water disposal system. Any oil floats on the water and flows out to a holding tank.

Natural Gas

Figure 4. This separator uses heated water to keep ice from forming.

The heated water in the bath will need to be topped up occasionally, as it will gradually evaporate away. Distillate, a liquid hydrocarbon that is one of the possible products of a gas well, may be difficult to separate from the gas. A smaller, lower pressure separator may be added to the tank battery. The added vessel will scrub out any remaining vapor from the gas, which may lead to a rise in distillate production.

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Gas Wells In Oil & Gas Production

Natural gas is often a secondary consideration when a well is first drilled and completed; the focus is more often on crude oil and other liquid hydrocarbons. However, there are wells that only or primarily produce natural gas. While gas wells may not require as many vessels or as much equipment, they do have some unique problems and there are important considerations to keep in mind.

Gas Wells

 

Gas Well Basics

While natural gas is obviously the primary product of gas wells, liquid hydrocarbons and water may be produced as well. Water will often be suspended in the gas and have to be scrubbed out. The liquid hydrocarbons usually take the form of condensates or distillates.

Condensate starts as a vapor, produced up through the well with the gas. The vapor condenses into a liquid at some point; this might happen as it’s being sent up the well, during processing, or perhaps even after the gas has been sold and sent through a pipeline. If the vapor condenses as it is leaving the well, the fluid will often fall back into the reservoir, with a negative impact on production. Condensate can be as clear as water.

Distillate is actually a low weight liquid hydrocarbon that is evaporated into vapor and then condensed back into liquid. This process is called distillation, and it is a process for purifying hydrocarbons which is fairly common. Distillation usually produces a casing head gasoline or crude, but does not yield any heavier oil.

 

Safety Valves And Other Devices

Gas wells can be dangerous and difficult to control. As a result, they often have some specific and important safety measures in place. Wells with a higher gas production will usually have a wider range of safety devices; with marginal or low production gas wells, there may not be enough gas coming from the well to warrant that additional layer of safety.

One of the more important safety measures are the well gates. Wellhead valves are sometimes referred to as gate valves, or simply gates. The name may refer to a style of valve that’s commonly used for this purpose, which uses a gate-like wedge or slab to cut off flow. A well will usually have two master gates. The upper master gate is used to shut in the well for testing or maintenance. A lower master gate is used as a backup if the upper master gate fails; the well can still be shut in while the upper gate is replaced or repaired.

Gas Wells

Figure 1. An example of a gas well christmas tree. Shown are the two master gates, the wing gate and a safety valve, and a variable choke.

There are two other common safety valves that can be used to shut in a well in the event of a problem. The first is at the surface, usually near the high pressure separator. This valve will shut in the well if the pressure rises too high, or if it falls too low. Low pressure may mean a break or leak in a line, which leads to gas being vented to the air. High and rising pressure may mean that water vapor has condensed out of the gas and frozen, blocking the line. A safety valve is visible in both Figure 2 and 3.

Gas Wells

Figure 2. A lower production gas well. In the background a separator and a compressor are visible.

Gas Wells

Figure 3. This is a gas well that produces a higher volume, and so has a wider range of safety devices.

The second safety valve is downhole, and is called the tubing safety valve. This valve will shut in the well if the line breaks and gas is being released into the atmosphere. It’s rarely needed, but should be checked on a regular schedule to make sure it’s functioning. Most often, a contracted wireline company will set and retrieve these valves, and services them when needed. The tubing safety valve is most often seen with high production wells. With lower production wells, a valve that is hydraulically opened can be installed. If the pressure falls, the well is automatically shut in without needing the tubing valve. That’s a system that’s more common in offshore wells.

In some cases, the additional safety measures aren’t built into the christmas tree, as the production volume is too low to require them.

Gas Wells

Figure 4. This is a gas well that produces small amounts, with a simpler wellhead.

Gas Production

All wells have a unique personality, with a different production volume and profile. Gas wells may produce small amounts, less than 100,000 ft, 3 in a day, or much larger volumes of millions of cubic feet a day. The amounts and ratios of water, condensate, distillate and other products will also vary from well to well. That means that the equipment needed to produce the well is also going to vary to meet the specific needs of each well.

The gas will be accepted by the purchasing company and usually sent through a pipeline. The purchasing company may not always accept produced gas. If there isn’t a market for gas at that moment, they will be reluctant to pay for new production. The purchasing company may send a representative around to shut in the well if they’re not buying gas or if there’s an emergency. The gas company may not buy gas for a longer period, meaning the well is shut in and not earning for that whole length of time. This is much less likely when the well is also producing crude oil, so producing both when possible is usually a more stable, and therefore preferable, option.

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Working Over Oil & Gas Production Wells

Problems like parted rods and leaking tubing, while they may require a servicing unit and crew, are part of standard maintenance operations for a well. There are larger problems that may require a full workover. Workovers can be expensive, as they not only require heavy equipment and a crew, but also may require that a well be killed and production totally stopped for a period of time.

Workover

 

Beginning Workover Operations

Before a workover can begin, the well usually has to be killed. This means that the pressure of the formation has to be equaled by pressure from above, usually by injecting treated water, oil, or formation water into the well. This brings the flow of formation fluid to a temporary halt. The fluid that is injected will eventually dissipate, allowing the well to flow once more. Swabbing the well can help hurry that process along. If more fluid is injected, the well will be killed for a longer period. The precise moment the well will begin flowing again can’t be predicted, so the workover should be completed in a time efficient way. If water is used as the fluid, potassium chloride can be mixed in to prevent the formation from being over hydrated.

Workover

Figure 1. Some equipment used for workovers. Shown is a water holding tank, a mud pit, and mud pump.

Blowout preventers may be installed as part of a workover. This is a valve at the top of the tubing string that can be shut to cut off flow from the well. Most are made up of two parts. In the upper part are rams that will enclose the pipe when closed. The lower part has several blind rams which are closed when the pipe is not in the hole. That means the flow can be contained if it begins at any point. There will need to be a quick switch between the christmas tree and blowout preventer.

 

Why Workover A Well?

A workover is an expensive operation, and it’s usually worth it only if there’s a serious problem or it could lead to a genuine increase in production. The majority of workovers are used to address problems downhole.

 

Stuck Pipe

Tubing or other pipe may become stuck when you attempt to pull it from the well. A workover may be required to free the stuck pipe so maintenance can be carried out and flow restored. Stuck pipes are usually caused by a few common problems.

Salt bridges are one of the more common problems that can lead to a stuck pipe. Salt bridges are created when the well is pumped in several daily cycles and the formation holds very salty water. The water will collect in the annulus space until pumping begins, when it will drain out. The water leaves behind a salt residue. When the process is repeated many hundreds of times over months of pumping, the residue can build up into bridges that block the annular space. Production can be reduced or even stopped altogether by the salt bridges that form. Fresh water can be dropped in the annular space, dissolving the salt. Salt bridges may still occur, however.

Scale can have a similar effect when it builds up over time. More scale will break out of the water as the temperature and pressure drop. Scale buildup can be drilled out, though there are chemicals and coatings that can be used to reduce scale.

Sand may also migrate to the bottom of the hole, and gravel may also become packed so that pipe or other equipment becomes stuck. Adding screens to perforated joints can help keep sand out of the well.

 

Stripping Wells

When both the tubing and rod string are removed from a well at the same time, it’s called stripping the well. The rod string can be broken out if the pump clutch is engaged and the rods turned counterclockwise. When the rods are turned enough, the rod will break. The upper part can be pulled, and then the tubing is also pulled so that the loose rod string comes to the surface. That’s repeated until both the entire tube and rod strings have been pulled from the well.

A notch or clutch is placed on the bottom of most downhole pumps, which is what allows the rod string to be broken from the surface. At the bottom of the pump is the clutch, and the string is lowered until the clutch engages and the rod string can be broken. A clutch is also placed at the top of some pumps, allow the string to be raised until the clutch engages. The placement of the clutch should be noted in the records, but the string can also be lowered or raised until the clutch engages. Safety joints can make it easier to separate the string so it’s easier to pull. Using a safety joint presents its own problems, however.

When stripping a well, there’s a risk of spilling oil. Lighter oils may also begin flowing up in the well, and potentially even lead to a blow out. All of these are time consuming and expensive to clean up. These problems can be prevented by using some special equipment, swabbing, and some other basic safety procedures.

 

Fishing Parted Tubing

Removing parted tubing from a well can be a pain, particularly when it’s difficult to catch and latch on to the loose, broken end downhole. To make fishing the tubing easier, a custom tool may be designed and made in a shop. Before that tool can be made, however, one or more impression blocks need to be run.

An impression block is a flat tool that is run downhole. The bottom face is made of some soft material which can be dropped onto the parted tubing so an impression could be made. A standard impression block is made of soft lead. In some cases, a softer block shop-made of tar may be used, or a harder block may also be used. The block is attached to the tubing and allowed to string and allowed to drop down the hole.

A variety of tools are available for rent and can be used to catch different types of parted tubing. An overshot with a milling surface is helpful when trying to catch a rounder fish and a spear is a tool best suited for fishing a jagged opening. The tubing string may fall to one side of the casing. When that happens, an offset finger can be constructed in the shop. This is a tool that wraps around the string when turned. The company that rents the tools may also have specialist that can help with difficult operations.

 

Fracturing Operations

Fracturing operations, better known as fracking, are done as a way of increasing the porosity of a formation, allowing a higher flow and an increase in production. There’s a wide range of fracking techniques and technology available.

The fracking process includes applying hydraulic pressure to split rock open. Sand is then injected into the fractures. The sand is much more porous than the rock, and allows for an increased flow through the formation. A few different fluids can be used to apply hydraulic pressure. Treated water, water produced from the well, and crude oil are the most common fluids used. A few other fluids made from petroleum products are also in use. Water soluble rock salt or oil soluble moth balls are added to the fluid so that it will penetrate further into the reservoir and create a deeper fracture.

Another sort of fracking uses high pressure acid to etch new passages and widen existing flow paths. A chemical called a neutralizer will make the acid safe after a period so that it can be produced back up to the wellhead after fracking has finished.

There are a few other more specialized forms of fracking, such as explosive heat fracking. That’s a method that is best used in shallow wells where denser products like paraffin are common.

 

Other Reasons

A well workover may be done for several other reasons. In some cases, it may be necessary to drill scale out of the bottom of the hole to bring production rates back up to expected levels. In these cases, the tubing can be used as a drill pipe by adding a rotating head and a power swivel.

Workover

Figure 2. This rig for working over a well has a double blowout stack so it can continue to be produced while the workover is in progress.

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