The Metro Detroit Oil Patch?
Our region has long had fossil fuel exploration primarily natural gas. This week's Crain's Detroit Business has an extensive article on the recent "Oil and gas exploration on rise in metro Detroit". With northern Michigan wells getting tapped out oil exploration is increasingly focusing on southeast Michigan."Oil and gas exploration company executives and state regulatory officials say permit requests to drill new wells have been moving over the past two years toward Southeast Michigan. The Detroit area has yielded modest oil deposits at relatively shallow depths, making them cheap to drill and easier to spot with new seismic imaging technology.
Exploration companies have obtained 20 permits for wells in the five-county region of Wayne, Oakland, Macomb, Washtenaw and Livingston so far in 2014, out of 86 total drilling permits statewide, according to data from the state Office of Oil, Gas and Minerals, a division of the Michigan Department of Environmental Quality.
The same five-county region accounted for 29 total permits in all of 2013, out of 205 permits issued statewide. "
The article gives and interesting overview of the history and current efforts including a couple success stories.
Quote:
Some Southeast Michigan wells produce quite well. One Jordan and West Bay joint venture in Troy, near the Michigan State University Management Education Center, cost less than $3 million to drill in 2002 but has produced about $60 million of natural gas since then, with MSU and the Michigan Department of Transportation as an adjacent landowner splitting about a one-sixth royalty or $10 million on sales since then, Brower and Gibson said.
Another well, at Kensington Metropark in Milford Township, has made about $13 million since the 1990s, Gibson said. Explorers usually negotiate a royalty of one-eighth to one-sixth of the revenue that wells produce in oil or natural gas, pro-rated to their share of the property covered by the lease.
He estimates West Bay has drilled about 50 sites in Southeast Michigan since 1986, of which about half have since wrapped production and are now plugged. The company reports more than a dozen active wells in Oakland County and about a half dozen each in Macomb and Wayne; it could start drilling the new well in Scio Township under its July 3 permit within 60 to 90 days.
