Strike in Alpine community keeps Overton state’s top oil producer
Oil discovery in Overton County is nothing new. As reported in the CBJ in February, there are more active permits issued for drilling in Overton County than any other of the state's oil-producing counties. The 2005 statistics, which are the most recent available, indicate that Overton County was the leader in oil production with 154,507 barrels, or nearly 33 percent of the state's total.
Additionally, 2005 data show that Overton County was home to Tennessee's five most productive new wildcat wells (oil wells far from other producing fields and on a structure that has not previously produced). Until last month the Lucy Newberry #11 operated by Young Oil Corp. was the most productive well in the state, yielding a total of 22,786 barrels in 2005 with a market value of more than $1 million.
On March 8 at a depth of 1,415 feet beneath the surface of the Overton County's Alpine community, Young Oil made one of the state's three biggest oil strikes in the last 30 years on the property of Gayle and Rick Norrod. Young Oil Corp. owner Anthony Young said the well initially produced about 100 barrels of oil an hour but had to be cut back to approximately 60 barrels an hour so output could be managed. Young estimates the well will produce $3 million to $5 million worth of oil by the end of the year.
Founded in 1996 Young Oil Corp., an independent exploration and production company headquartered in Knob Lick, Ky., is the leading producer and most successful drilling operator in the Appalachian Basin and is also the largest producer of crude oil in Tennessee by almost twice over the next largest producer. The Tennessee Oil & Gas Association named Anthony Young Tennessee Oil Man of the Year in 1999 and 2004.
Young, the father-of-five hairdresser turned oilman, said his company continues to evaluate potential acquisitions, screens drilling prospects for economic and technical merit and employs a conservative philosophy of operations while using the latest scientific methods available, often obtaining a second opinion to verify their findings.
"I have the best geologist in this part of the United States," Young said of his Cookeville-based geologist, Jim Washburn, explaining, "The use of recognized independent engineering and geological consulting firms enhances the chance of success in an industry known for its high risk."
Young utilizes his own rig to drill all his company's wells, which speeds up the company's exploration program and has added to the company's success in finding Tennessee fracture-enhanced reservoirs. Young focuses his exploration efforts on shallow formations, less than 2000 feet. In his first four years in business, he drilled 72 wells and struck oil 57 times. Each year his ratio has improved, he said.
"There are thousands of potential productive leases in Tennessee and Kentucky," Young said. "We are going to drill a lot of them, but we could do more with some more good financial partners."
Like all oil prospectors, Young is a dealmaker. He settles on a prospect, secures a lease from the landowners, who receive a 12.5 percent stake in revenues from oil (or gas) found, and finds an investor or partner to share the drilling costs
Young said he encourages anyone willing to take the risk to talk to an accountant about the numerous tax benefits for investors in oil exploration. For additional information on tax benefits visit www.irs.gov. For information about investing in Young Oil's exploration for oil and natural gas visit www.youngoilcorp.com.