Drilco, a West Virginia company, is asking for accredited investors to buy in to its drilling program. We usually wouldn’t post about this kind of stuff, but it is a company from West Virginia doing work in West Virginia and we really kind of like all aspects of the oil and gas industry, so here it is.
The offer says that they hold 15,000 acres in seven West Virginia counties, suggesting that they will be working in all seven counties. As you dig into the paperwork a little farther, however, you see that they are going to be working on the Ritchie/Gilmer county border, and that they already operate 200 wells in that area. They don’t even name the other five counties (although we skimmed a lot of the document, we think we read everything that would discuss locations). They probably mention the other five counties just in case they run into insurmountable difficulties in the projected project area and have to make a move elsewhere.
They say that they will be drilling to the Big Injun, Mississippian, Berea, Devonian, and Marcellus (which is a part of the Devonian). Other companies are drilling horizontals to the Big Injun, Mississippian, and Berea, looking for oil. The Devonian is going to be a gas play. Drilling horizontals in search of oil seems like a good idea, but will run into challenges with fracking as old, unrecorded wells could sap off frack energy.
They say they will be drilling ten vertical and ten horizontal wells. The vertical wells will be more exploratory than anything.
They also say that their horizontals will be between 2,400 feet and 3,500 feet. This suggests two things. One, they don’t have the technology that other companies do to extend their laterals out over 6,000 feet. Two, they are hemmed in by leases owned by other companies, or the formations they will be drilling to are perforated by old vertical wells that would prevent efficient fracking.
It’s an interesting look into the world of high finance and oil and gas development.
EDIT: Just to be clear, we aren’t endorsing Drilco, suggesting that anybody invest with them, or anything like that. We just thought it was interesting to see what the financing side of oil and gas development looked like, and that other people might be interested, too.