oil mine

Sheridan company mines for oil near Thermopolis

2013-05-13T06:00:00Z Sheridan company mines for oil near ThermopolisBy ADAM VOGE Star-Tribune energy reporter Casper Star-Tribune Online

THERMOPOLIS — A spark flew down a detonation line into the 220-foot shaft and ignited charges waiting below.

“Fire in the hole!” yelled a crew member.

An explosion could be felt underfoot. The shaft cover, basically a heavy tin gate, rattled as the energy from the charges reached the surface.

“That’s another 10 feet,” Joe McPhie, New Era Petroleum’s chief operations officer, said to a co-worker.

Ten feet closer to the goal: to sink a 17-foot-wide shaft about 900 feet into the Thermopolis countryside, separated from Hot Springs State Park by a butte and a few miles. After that, New Era wants to excavate a large domed room from which it can run its operations.

New Era is mining the hills just outside of Thermopolis, a town known for dinosaur fossils and hot springs. But they aren’t after coal, uranium, trona or gold.

New Era is mining for oil. And they think they’ve stumbled upon an incredibly efficient way to get it.

Proving ground

New Era Petroleum’s project near Thermopolis isn’t the company’s first foray into mining for oil.

The Sheridan company recently completed a test near Greybull. On a 40-acre site, the company sank a shaft, excavated a main room and drilled horizontal wells into an oil-bearing formation.

The company repurposed an old coal-mining drill to break the earth and create its series of oil wells. And instead of each well being pumped by itself, all wells were channeled to one piece of equipment, called a receiver header, which used a single high-efficiency pump to move the oil to storage on the surface.

Results were encouraging.

“This is novel to the industry but the economics of recovery support our capital costs,” said John Hoak, New Era president and chief executive officer. “We expect to be successful.”

With results in hand, the company — founded in 2010 — began exploring the West Warm Springs field near Thermopolis, a historically productive but sputtering area. The company knew it had a wealth of oil still in the ground — about 22.5 million barrels are expected to be in place — but the hilly landscape and other factors had kept producers away.

Starting in March 2012, New Era drilled a series of core holes to test the rock below, checking if the ground could handle excavation.

In August, once the core holes were drilled, the company began clearing the site and sinking a shaft. Now, nine months later, the company’s shaft extends 220 feet below ground.

“We make progress every day, every week,” Hoak said.

Slow, steady progress

Sinking a proper mine shaft takes time.

Several times a day, a contracted drilling crew plants a round of explosives about 10 feet into the ground at the bottom of the shaft.

The crews are lifted from inside the vertical tunnel by a large hoisted bucket before sealing the 17-foot opening. They ignite the charges, breaking up the earth. Then they lower themselves back to the bottom, aided by a constant air supply from a large tube that winds its way to the bottom of the pit.

The crews use both automated scooping equipment and handheld shovels to clear out the newly broken rock, a process called mucking. They fill the yellow bucket to the brim with the red earth for disposal on the surface.

It takes about 20 minutes to fill and dispose of a bucket. It takes 30 to 35 buckets to clear out the debris from one blast.

Each blast clears about 10 feet, and 920 feet is the goal. The crews hope to finish the shaft by the end of the summer.

Common science

New Era’s technique combines the hallmarks of two industries: mining and oil extraction.

Instead of drilling and pumping from the surface, the company will drill direct horizontal wells that start below ground. Hoak and McPhie sing the praises of the technique, which they say others around the world have tried with lesser degrees of sophistication.

Among the technique’s advantages, they say, is that it’s more economical.

“If you set up on the surface, you have to drill nonproductive rock,” McPhie said. “We get closer to the pay.”

New Era says their approach is also better for the environment. The Warm Springs field, for example, covers about 400 acres. When construction on New Era’s mine is done, they’ll have disturbed about 10 acres.

And the company is able to harvest oil a lot of others cannot, largely because of where it’s located and what’s on the surface above.

“In the fields we target, our method is most efficient,” McPhie said.

New Era hopes to finish its shaft by the end of the summer. It would then finish the engineering of its excavated dome and start drilling by early summer 2014.

Although many of their employees are more experienced in mining, Hoak said dealing with oil should be no problem.

“We know how to mine and how to drill,” he said. “We’re used to dealing with water, so we know how to handle fluids. In this case, the fluid is oil.”

And once they establish the Warm Springs project, Hoak said the sky is the limit for bringing New Era’s technique to new fields — although he wouldn’t say where.

“We will almost certainly develop around Wyoming,” he said. “We have other targets around the U.S. and world.”

Reach energy reporter Adam Voge at 307-266-0561, or at adam.voge@trib.com. Read his blog at trib.com/news/opinion/blogs/boom.

Copyright 2015 Casper Star-Tribune Online. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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