Gas Well vs. Oil Well: Mineral Rights Terms

When trying to sell your mineral rights, it is important to determine whether the wells on your property are technically classified as oil or gas wells. People may use these terms for their wells interchangeably because they often produce both. However, failure to correctly differentiate between the two may cause profound economic consequences, from well spacing issues, pipeline company prioritization, to the possibility of severing ownership in some areas.

If you’re a mineral rights owner, keep reading to learn more about the differences between oil and natural gas wells and how they might impact your mineral rights.

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Oil and Gas Wells: Telling the Difference

The truth is that many wells contain a combination of both crude oil and gas, which can make it complicated to distinguish between an oil and gas well. The key difference lies in the ratio of oil to gas in the production rates.

Because wells often contain a mixture of oil and gas, provisions of the Texas Natural Resources Code clearly make a distinction based on the ratio of each element. The Code defines an oil well as a well “that produces one barrel or more of oil to every 100,000 cubic feet of gas.” On the other hand, a well that produces pure natural gas with no oil, or produces more than 100,000 cubic feet of gas per barrel of oil, is considered a gas well.

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Differences Between Oil and Natural Gas

In addition to the differences in oil and gas wells, there are also differences in the substances themselves.

Compared to oil, gas produces fewer greenhouse gases, with oil having a higher energy density. Oil is used to produce products like gasoline and diesel, while natural gas is often used for heating and electricity generation. 

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Common Drilling Methods for Oil vs. Gas Wells

Along with many other factors, the ratio of oil to gas produced by your well can sometimes have an impact on the type of extraction method used to extract hydrocarbons. Oil wells are designed to produce oil hydrocarbons, while gas wells are designed to produce natural gas.

While oil wells often target more permeable rock to allow the oil to flow, gas wells are often drilled in low-permeability areas, requiring more complex extraction methods. Unlike oil wells, which use natural reservoir pressure or artificial lifts, gas wells often don’t require mechanical pumps, instead relying on natural pressure flow to bring the product to the surface. For both, drilling mud is often vital. A few of the most common drilling methods include:

• Vertical Drilling – During the vertical drilling process, gas sitting close to the surface is extracted, with vertical wells drilled straight down. These wells are common, 
• Horizontal Drilling – In horizontal wells, the drill pipe is directed straight down before the drill bit is turned sideways, used to produce oil with fewer surface wells.
• Hydraulic Fracturing – Hydraulic fracturing or fracking uses high-pressure water to extract oil and gas trapped in rock formations.

From offshore drilling to drilling in the desert, the choice of drilling method depends heavily on the surface location. Fracking, which uses large amounts of water, can be used for both oil and gas wells, with this drilling method primarily being used in the U.S. Horizontal drilling accounts for a small portion of the industry, but that share has grown significantly over the last decade. Wells can be drilled to depths of more than 6,000 meters, with horizontal directional drilling producing longer wells.

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Risks of Oil vs. Gas Wells

Due to the differences between the drilling rigs and oil recovery methods used for oil and gas exploration, there are also differences in the risks posed to the environment by the drilling sites.

With gas-producing wells, there are serious risks of methane leaks, while oil drilling can pose a risk of spills and local species disruptions. Both types of wells can destroy wildlife and lead to animal migration.

Because of these risks, it’s especially important to work with a capable mineral rights broker when selling your rights to ensure your property is protected. Mineral rights buyers in the oil and gas industry can take advantage of uninformed sellers, but a mineral broker can work with you to limit impacts to the surface area.

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Get the Information You Need About Oil and Gas Wells

As a mineral rights owner, there are lots of terms you’ve probably heard floating around: seismic data, injection wells, drilling fluid, and petroleum geology. When it comes to making the right choices for your rights, it can be easy to get bogged down in jargon and lose sight of what matters. That’s where a mineral rights broker comes in. 

Here at The Mineral Auction, we help owners make the most of their land rights, working to sell mineral rights for maximum value while protecting the surface. To learn more about selling your rights, don’t hesitate to reach out for assistance.

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Make the most of your mineral rights with The Mineral Auction. Reach out today to learn about your options.

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