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December 16, 2013

Drilling for oil at ISU: Derrick debuts on campus

Crews readying to explore below Terre Haute

TERRE HAUTE — Drilling started on Monday in what many hope will be the first successful oil well downtown in more than 100 years.

Pioneer Oil of Lawrenceville, Ill., brought in more than 20 truckloads of drilling equipment over the weekend, despite heavy snow, and was set to begin boring into the ground Monday afternoon, said Steve Miller, chief financial officer for Pioneer.

“It’s very exciting for us to be drilling on [the Indiana State University] campus in downtown Terre Haute,” Miller said. Pioneer’s founder and president, Don Jones Jr., has known the city’s rich oil history all of his life but never thought it would be accessible, he said.

New drilling technology, including “horizontal drilling,” has emerged in the last 10 years, making difficult-to-reach subterranean pools of oil economically viable. Technology now also allows drilling operations to capture gases and odors so that even wells in heavily populated areas are feasible, Miller said.

A tall oil derrick, topped with an American flag, now stands at the drilling site at 10th and Chestnut streets. “They fly the flag every time they put the big derrick up,” Miller said.

Plans call for Pioneer to continue drilling for about a week. After that, the company will analyze what was found and then bring in a smaller “completion rig,” Miller said. If all goes according to plan, the well could be ready to produce oil in about a month, Miller said.

In an earlier interview, Miller said Pioneer expected to drill down about 1,000 feet before turning the drilling equipment horizontally.

Pioneer has been working toward this moment for more than a year. In August of 2012 Indiana State University got city approval, through the board of zoning appeals, for the drilling operation. In the past few months, Pioneer has been signing oil royalty leases with downtown property owners whose land sits atop what is believed to be the downtown’s oil pool. More than a dozen such leases were signed, Miller told the Tribune-Star in a phone interview Monday.

The last successful oil well in downtown Terre Haute was drilled in 1903, Miller said. That well, which was at the site of the current Hulman Center, produced into the 1920s, he said.

Pioneer has a record of drilling for oil in unconventional locations. The company operates a well on the campus of the University of Southern Indiana and also at the New Harmony State Park.

It is not yet known how much oil – if any – the well will produce nor how much money ISU can expect to receive in royalties. Oil lease contracts pay property owners a portion of any sales from a producing well.

A crew of about 10 workers will man the drilling site at 10th and Chestnut streets “24/7,” Miller said.

Pioneer has enclosed the production site with fencing and landscaping. Despite drilling, no vibrations are expected to be felt outside the fenced area, and noise is expected to be minimal, Miller said. “We don’t expect there to be any disturbance of the neighbors,” he said.

Reporter Arthur Foulkes can be reached at 812-231-4232 or arthur.foulkes@tribstar.com.



 

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