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Production Facility Lifecycle

The decision to close an oil and gas production facility may simply result from the plugging and abandonment (PA) of associated wells due to sub-economic conditions. This economic analysis may simply be related to production volume and or commodity prices. The decision to PA can also be influenced by well integrity issues, for example, if the cost to remediate a well relative to production or pricing makes it no longer financially feasible to continue operating. Regulatory drivers such as requirements to modify casing programs may also influence a decision to PA a well. For example, open-hole completions were once common but many oil and gas regulatory agencies are requiring modifications and upgrades that may change the well economics.

Other issues that may drive site closure include encroachment from surface development or the consolidation of facilities to improve economic and environmental efficiencies. For example, the first image below shows oil and gas production facilities in a rural area of Colorado in the 1990’s. These production facilities were closed out in the early 2000’s due to low production and encroaching surface development, as seen in the comparative photo taken in 2005.


1990’s Oil and Gas Production in Rural Area


2005 Surface Development Progression within the Same Historical Oil and Gas Production Area