Well, well, well. This is interesting. And spooky. And maybe surprising? Or maybe not.
The state’s largest oil and gas producer, Anadarko Petroleum Corporation, plans to shut down 3,000 vertical wells in northeastern Colorado after a fatal home explosion in Firestone near one of its wells.
More than 3,000 wells, which produce around 13,000 net barrels of oil a day, will be closed until the company’s “field personnel can conduct inspections and test equipment in facilities and underground lines associated with each wellhead,” the Texas-based oil company said in a statement Wednesday. The exact cause of the explosion is still being investigated.
Or, as is reported in an excellent article in The Denver Post:
State regulators announced they are investigating the cause of the April 17 explosion that killed two men in a recently built home located within 170 feet of a well that was drilled in 1993 and later acquired by Anadarko.
(emphasis mine)
Okay. Just to be clear, if anything about this is clear, it sounds like they are shutting down the 3,000 vertical wells well after finding out state regulators are investigating...hmmm.
Anadarko said while a lot of unknowns remain about the explosion, it would shut in all vertical wells of that same vintage out of an “abundance of caution.”
“Colorado residents must feel safe in their own homes, and I want to be clear that we are committed to understanding all that we can about this tragedy as we work with each investigating agency until causes can be determined,” Brad Holly, Anadarko’s senior vice president of U.S. Onshore Exploration and Production, said in a statement.
The Colorado Independent tells us more about this story, and the possible inferences:
Firestone is in Weld County, about 30 miles north of Denver. Housing tracts are being built in on the heavily-drilled land there.
News stories after the explosion reported that Irwin, a master plumber, was helping Mark Martinez install a hot water heater, apparently at or near the time of the explosion. The insinuation was that their work may have led to their deaths.
But that narrative sounded immediately curious to those who knew Irwin and his work, and became less plausible when Colorado’s Public Utilities Commission passed the investigation on to the COGCC (Colorado Oil and Gas Conservation Commission), which regulates the oil and gas industry.
In a statement, the COGCC said that it has been investigating the incident since Friday, April 18. The investigation includes “directing environmental sampling and inspecting oil and gas wells in the vicinity, including an Anadarko oil and gas operation located approximately 170 feet southeast of the property, and reviewing their history.” The Commission says it is also evaluating additional steps to review activities in the region.
The 170-foot distance the COGCC cited is less than the 200-foot estimate Anadarko cited in its statement.
Don’t get too excited. Only two people were killed and the shutdown is very likely only temporary.
Thursday, Apr 27, 2017 · 6:00:25 PM +00:00
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rflctammt
Update: Not surprisingly, the company’s stock is not doing “well” today. Also, please note that in the bold type (my emphasis) the corporation states the wells “could remain shut for 2 — 4 weeks.”
Yes — this is only temporary, folks. From Marketwatch.com:
Anadarko's stock tumbles as explosion prompts closure of over 3,000 wells for weeks:
Shares of Anadarko Petroleum Corp. APC, -5.54% tumbled 6.3% in active midday trade Thursday to a nine-month low, after the oil and gas exploration company said it would close more than 3,000 wells in response to the last week's fatal home explosion in Firestone, Colo. The stock changed hands recently at $56.13, the lowest level seen since Sept. 16, while volume spiked to 7.9 million shares, or more than double the full-day average. The company said late Wednesday that the wells, which account for total production of about 13,000 barrels of oil equivalent per day, could remain shut for two to four weeks while inspections and testing of equipment can be conducted. Analyst Paul Grigel at Macquarie Research reiterated his overweight rating on the stock, saying he believed any impact from the shut in production will be limited. "We believe the ultimate impact on financials and the company is likely to be de minimis but do recognize this will likely be a near-term focus until the investigation by local fire officials is complete," Grigel wrote in a note to clients. The stock has plunged 19% year to date, while the SPDR Energy Select Sector ETF XLE, -1.32% has shed 11% and the S&P 500 SPX, +0.08% has gained 6.5%.