I have a well in Ward County that is down. Originally I was told it was due to a work over (beginning in April) but now it is termed as a “PTSO.” Can someone explain what that means?
What state are you in, Keith? Where did you see “PTSO”?
Thanks for your reply. I live in Oregon but the well is in Ward County, Texas.
Do you have any information on this issue?
Wanted to follow up. I guess I hadn’t answered your second question, "where did you see “PTSO?” The operator, Parsley, has this as the status of the well currently down since April. Originally, my contact thought it was for a work over but this seems too long.
I believe Emily gave you the best guess at the definition of PTSO (preemptive temporary shut-in operations), but I can give you some color on what might have it down so long. There’s probably a variety of things happening here:
’Preemptive’ work: the well likely needed some preventative maintenance (like a pump change out) to avoid a larger expense in the future (like a stuck, mangled pump), so looks like they turned the well off before it broke down completely.
Commodity prices: That the well went down for this maintenance right when pricing tanked is likely not a coincidence. If the well was starting to struggle due to needing maintenance, it might have been a good candidate to shut-in first.
Large queue: Let’s assume Parsley isn’t playing any lease games and genuinely has the well down for operations (although they very well could be). Operators can have hundreds of wells on queue for workover at any single time, partly because wells need maintenance quite often and partly because a large queue gives you the most opportunity to prioritize (5 workover rigs working on wells with a 90% average return on investment rather than 10 rigs working on wells with a 50% average return on investment). Many times these wells limp along with a failing pump or worsening hole in the tubing before completely halting production. The reduced commodity prices have forced operators to improve wells that were “getting by” at $60 oil, thus there might have been a sudden increase in workover queue.
You would think it’d be in everyone’s best interest to get the wells back online ASAP, but workovers add up fast in a cash-strapped environment. Production managers are walking a fine line to maximize their budget, maximize production, and hold leases with production.
It’s like if you have a fleet of 100 trucks and you need to know how many mechanics to hire. Of course trucks have a regular maintenance schedule, but they also break down at unpredictable times. You need to have enough mechanics to keep up with the critical work but not too many where they’re just polishing paint and vacuuming cookie crumbs all day long waiting for the next truck to break.
Do you have other wells in your lease producing? And if not, what language does your lease have surrounding a cessation of production after the primary term?
Sorry for my absence. I believe that tracy_lenz did a great job answering your question! Are you satisfied with her response?
Many thanks to Tracy for the detailed response! I very much appreciate it!