The Louisiana landscape is littered with abandoned and potentially hazardous oil and gas wells. Enter White Knight Production.
The Lafayette company, led by CEO Jerry Wenzel, rescues under-exploited oil and gas resources from old wells and areas that have been previously used but are not dried up.
In a twist to standard oil and gas drilling, White Knight does not explore new areas to drill; rather, the company focuses on old wells onshore or in inland waters in the U.S.
“We learned how to look at areas and find bypassed or missed opportunities,” says CFO David Knox. “So if we know there’s oil or gas still in a well, it’s a lot better to go get it out of an existing well.”
Because the company is finding these “missed opportunities,” fracking is not involved, as it is “specially designed to break or create channels for oil or gas to flow to the wellbore,” according to Knox. Fracking is done when the rock is too dense and the oil or gas cannot flow.
“We don’t like those kinds of reservoirs because they’re very expensive and very difficult to deal with,” says Knox. “We drill old reservoirs where it naturally flows through the rock and into the wellbore.”
If a hole is drilled into the ground and there is enough pressure, the resources flow. If there is a lower pressure, different mechanical pumps are used to help the well flow.
“We’ve got a team of engineers and geologists and landmen to execute well work on existing wells and improve those and to drill new wells,” Knox says, adding that the risk is lower and the value proposition higher, as a new well can cost “anywhere from $500,000 to a few million.” Working on an existing well, however, costs about $100,000.
“We buy old fields that are still producing oil and gas and fields that we determine have good remaining potential that can be improved,” says Knox. “We can increase production.” This is how White Knight raised its revenue from approximately $7 million in 2015 to $19 million last year.
The company was founded in 2013 in Houston and then came to Lafayette and bought oil properties in California in 2015.
“We lived hand-to-mouth for 2013 and 2014,” says Knox. “We’re expanding rapidly; 2017 is probably going to double again.”