The Wold family has been involved in oil and gas in Wyoming for more than 60 years. John S. Wold started Wold Oil Properties in 1950, passing the reins to his sons, Peter and Jack Wold, who kept the headquarters in Casper.
The company historically worked with oil properties across Wyoming and the world. At times they operated as far away as Papua New Guinea.
In 2013, Peter and Jack Wold formed a new business, Wold Energy Properties, run by Jack Wold out of Denver.
“It is a company that is building a lease hold position in the Powder River Basin, with the intent of permitting a number of wells and taking advantage of a horizontal and fracking technologies that are now successfully being applied in the basin,” Peter Wold said. “We are very targeted in our activities.”
A deep and long horizontal well can cost $15 million. Wells can be 12,000 to 13,000 feet deep, with up to 30 stages of hydraulic fracturing.
“Those are tremendously expensive,” he said. “What we have done, is we have brought in some outside capital to participate with us in this new company.”
The Star-Tribune caught up with Peter Wold in his downtown Casper office to talk about how this boom compares to earlier ones, prices of oil and the future of the Powder River Basin.
Casper Star-Tribune: Where do you think oil prices are going?
Wold: That’s a great question. I think it hit $75 yesterday or the day before. We of course hope that it won’t stay there that long, but there is the possibility it could depending on what the international economy does, and also what kind of production levels we get to domestically as we move towards energy independence... If I knew, I would probably be a Wall Street trader. I think it’s probably going to stay for a while in the $80s, would be my guess.
CST: Do you have any sense of the break-even point in the Powder River Basin?
Wold: We’ve done a study that indicates the break-even place for our activities would be in the mid to high $60s… To get a decent rate of return you would need to have [West Texas Intermediate] price to be in the high $60s.
CST: Prices today are around $68. Is that close to the break-even point?
Wold: That’s getting dangerously close to the point where companies will think twice about drilling, if it stays that way.
There are a lot of wells in the queue to be drilled that are probably going be drilled regardless of what the price is, with hopes and expectations that the prices will go back up.
CST: Would that be the same in Laramie County?
Wold: Probably. But we’re not down there.
CST: What is the potential of the Wyoming fields in the Powder River Basin?
Wold: I think it’s fabulous. There are all kinds of oil fields that have been discovered and developed there… The upside potential is phenomenal.
CST: Historically, how do they compare to other big plays?
Wold: I don’t think the continuity of our formations will be that similar to the Bakken, for instance… You’re not going to find an area that may be 100 square miles where you can punch a well every section and expect to get into a good producing zone.
I think it will be trickier, and that’s one of the reasons the Powder River Basin has been slower getting developed than what the Bakken did.
CST: How long do you think they will last?
Wold: What’s happening right now is there is a race to permit. And that is why the [Bureau of Land Management] and the Wyoming Oil and Gas Conservation Commission are swamped with drilling applications right now, because companies understand the opportunity and they are permitting wells that they may be drilling two, three, four years from now.
One of the issues you read about in the paper, is there are 5,000 wells being planned and drilling in the Powder River Basin. And that is probably true… What companies are doing are planning for the next five years. Those wells won’t be drilled in the next year. You might find depending on what the price of oil might be doing there might be quite a bit less than that. Just because you file a drilling permit doesn’t mean you will drill a well. It certainly doesn’t mean you’re going to drill it next year.
CST: Do you think the oil could last 20 years? Fifty years?
Wold: I think there will be oil and gas produced in the Powder River Basin for another safely 25 to 50 years.
CST: How does this compare to previous booms?
Wold: This is a technology boom with the horizontal drilling and fracking success you’re seeing. That’s characteristic of the Marcellus back in Pennsylvania and all of the Bakken. All of those fields have been developed as a result of the advancement of technology.
CST: Do you see this as bigger than past booms?
Wold: I think this is a really big one.
CST: Do you think this boom could be a little more stable than earlier ones?
Wold: I think it’s got great legs. We have tremendous shale resources that could be tapped and that are being tapped.