The creation and life of a well can be divided up into five segments: Planning, Drilling, Completion, Production, and Abandonment.

     Geologists use seismic surveys to search for geological structures that may form oil reservoirs. The classic method includes making underground explosion nearby and observing the seismic response that provides information about the geological structures underground. However, passive methods that extract information from naturally-occurring seismic waves are also utilized.  Other instruments such as gravimeters and magnetometers are also sometimes used in the search for petroleum. When extracting crude oil, it normally starts by drilling wells into the underground reservoir. When an oil well has been tapped, a geologist, known on the rig as the "mudlogger," will note its presence. Historically, in the U.S., some oil fields existed where the oil rose naturally to the surface, but most of these fields have long since been used up, except certain places in Alaska. Often many wells, called multilateral wells, are drilled into the same reservoir, to ensure that the extraction rate will be economically viable. Also, secondary wells may be used to pump water, steam, acids or various gas mixtures into the reservoir to raise or maintain the reservoir pressure, and so maintain an economic extraction rate.

     An oil well is created by drilling a hole 5 to 36 inches in diameter into the earth with a drilling rig which rotates a drill string with a bit attached. The drill bit, aided by the weight of thick walled pipes called "drill collars" above it, cuts into the rock. There are different types of drillbits, some cause the rock to fail by compressive failure. Others shear slices off the rock as the bit turns. Drilling fluid is pumped down the inside of the drill pipe and exits at the drill bit in order to cool the bit, lift rock cuttings to the surface, and prevent bore destabilization. The pipe or drill string to which the bit is attached is gradually lengthened as the well gets deeper by screwing in additional 30-foot (10 m) sections of pipe at the surface.

     After the hole is drilled, sections of steel tubing, or casing, slightly smaller in diameter than the borehole, are placed in the hole. Cement may be placed between the outside of the casing and the borehole. The casing provides structural integrity to the newly drilled wellbore in addition to isolating potentially dangerous high pressure zones from each other and from the surface.

     With these zones safely isolated and the formation protected by the casing, the well can be drilled deeper (into potentially more-unstable and violent formations) with a smaller bit, and also cased with a smaller size casing. Modern wells often have 2-5 sets of subsequently smaller hole sizes drilled inside one another, each cemented with casing.

     This process is all facilitated by a drilling rig which contains all necessary equipment to circulate the drilling fluid, hoist and turn the pipe, control downhole pressures, remove cuttings from the drilling fluid, and generate onsite power for these operations.

     After drilling and casing the well, it must be “completed.” Completion is the process by which the well is prepared to produce oil or gas.  In a cased-hole completion, small holes called perforations are made in the portion of the casing which passed through the production zone, to provide a path for the oil to flow from the surrounding rock into the production tubing. In open hole completion, often “sand screens” or a “gravel pack” is installed in the last drilled, uncased reservoir section. These maintain structural integrity of the wellbore in the absence of casing, while still allowing flow from the reservoir into the wellbore. Screens also control the migration of formation sands into production pipes and surface equipment, which can cause significant problems.

     After a flow path is made, acids and fracturing fluids are pumped into the well to fracture, clean, or otherwise prepare and stimulate the reservoir rock to optimally release oil into the wellbore. Finally, the area above the reservoir section of the well is packed off inside the casing, and connected to the surface via a smaller diameter pipe called tubing. This arrangement provides a redundant barrier to oil leaks as well as allowing damaged sections to be replaced. Also, the smaller diameter of the tubing draws oil at an increased velocity in order to overcome the hydrostatic effects of heavy fluids such as water. In many wells, the natural pressure of the subsurface reservoir is high enough for the oil to flow to the surface. However, this is not always the case, especially in depleted fields where the pressures have been lowered by other producing wells, or in low permeability oil reservoirs. Installing a small diameter tubing may be enough to help the production, but artificial lift methods may also be needed. Common solutions include downhole pumps, gas lift, or surface pump jacks. Many new systems in the last ten years have been introduced for well completion, including all in one systems that have cut completion costs and improved production, especially in the case of horizontal wells.

     The production stage is the most important stage of a well's life, when the oil is produced. By this time, the oil rigs and workover rigs used to drill and complete the well have moved off the wellbore, and the top is usually outfitted with a collection of valves called a production tree. These valves regulate pressures, control flows, and allow access to the wellbore in case further completion work is needed. From the outlet valve of the production tree, the flow can be connected to a distribution network of pipelines and tanks to supply the product to refineries or oil export terminals.  As long as the pressure in the reservoir remains high enough, the production tree is all that is required to produce the well. If the pressure is depleted and it is considered economically viable, one of the artificial lift methods mentioned above can be employed. 

     Workovers are often necessary in older wells, which may need smaller diameter tubing, scale or paraffin removal, acid matrix jobs, or completing new zones of interest in a shallower reservoir. Such remedial work can be performed using workover rigs – also known as pulling units to pull and replace tubing, or by the use of a well intervention technique called coiled tubing. Enhanced recovery methods such as water flooding, steam flooding, or CO2 flooding may be used to increase reservoir pressure and provide a push to move oil out of the reservoir. Such methods require the use of injection wells (often chosen from old production wells in a carefully determined pattern), and are used when facing problems with reservoir pressure depletion, high oil viscosity, or can even be employed early in a field's life. In certain cases – depending on the reservoir's geomechanics – reservoir engineers may determine that ultimate recoverable oil may be increased by applying a water flooding strategy early in the field's development rather than later.

     When a well no longer produces or produces so poorly that it is a liability, it is abandoned. In this process, tubing is removed from the well and sections of wellbore are filled with cement to isolate oil and water zones from each other, as well as the surface. Completely filling the wellbore with cement is costly and unnecessary. The surface around the wellhead is then excavated, and the wellhead and casing are cut off, a cap is welded in place and then buried.

The production from an oil well declines over time as oil is extracted. The point at which the well no longer makes a profit and is plugged and abandoned is called the Economic Limit. The equation to determine the economic limit contains four factors, namely: (1) taxes, (2) operating cost, (3) oil price, and (4) royalty. Because of differences in operating costs, different companies may have different Economic Limits for a given well.

     At the Economic Limit for large oil companies there often is still a significant amount of unrecoverable oil left in the reservoir. They might be tempted to defer physical abandonment for a period of time, hoping that the oil price will go up or that new supplemental recovery techniques will be perfected. However, lease provisions and governmental regulations usually require quick abandonment; liability and tax concerns also may favor abandonment.

     Workover activities include one or more of a variety of remedial operations on a producing well to try to increase production.  These operations include:

     Sand Cleanout Operations  -   are performed to remove the buildup of sand in the wellbore.  In wells that produce from loosely consolidated sandstone formations, a certain amount of sand is usually produced with oil. Although some of this sand will be produced at the surface, most of it will accumulate at the bottom of the hole. Continued accumulation of the sand in the wellbore will eventually cut the oil-producing rate and may even halt production altogether. When this problem, known as sanding, occurs, a service rig equipped with a sand pump on a wire line is called to the scene. The sand pump is a special tool which removes the sand from the wellbore.

     Repairing Casings  -  Casings can be damaged by corrosion, abrasion, pressure, or other forces that create holes or splits. A packer is run down the well to locate the hole in the casing. Fluid is pumped into the casing above the packer. A loss of pressure indicates a hole in the casing. The following are the principal methods for repairing casing:

• Squeeze cementing.
• Patching a liner.
• Replacing casing.
• Adding a liner.
• Opening collapsed casing.

     Sidetracking  -   is the workover term for drilling a directional hole to bypass an obstruction in the well that cannot be removed or damage to the well, such as collapsed casing, that cannot be repaired. Sidetracking is also done to deepen a well or to relocate the bottom of the well in a more productive zone, which is horizontally removed from the original well. To sidetrack, a hole (called a window) is made in the casing above the obstruction. The well is then plugged with cement below the window. Special drill tools, such as a whipstock, bent housing, or bent sub are used to drill off at an angle from the main well. This new hole is completed in the same manner as any well after a casing is set.

     Plug-back  -   places a cement plug at one or more locations in a well to shut off flow from below the plug. Plug-back is also used before abandoning a well or before sidetracking is done. There are two methods for placing a cement plug in a well:

• Plug-back using tubing.
• Plug-back using a dump bailer

     Acidizing  -   Acid treatments have been applied to wells in oil and gas bearing rock formations for many years. Acidizing is probably the most widely used workover and stimulation practice in the oil industry.  By dissolving acid soluble components within underground rock formations, or removing material at the wellbore face, the rate of flow of oil may be significantly increased.  A number of different acids are used in conventional acidizing treatments, the most common are:

• Hydrochloric, HCl
• Hydrofluoric, HF
• Acetic, CH3COOH
• Formic, HCOOH
• Sulfamic, H2NSO3H
• Chloroacetic, ClCH2COOH

     These acids differ in their characteristics. Choice of the acid and any additives fora given situation depends on the underground reservoir characteristics and the specific intention of the treatment. The majority of acidizing treatments carried out utilize hydrochloric acid (HCl).