Global Energy Innovation
“Global energy innovation is no stranger to looking across borders for talent. In the case this case of US domestic shale drilling, corporations will ultimately look to our global neighbors to the North and South. Mutual joint-agreements between companies across geographical borders should only serve one mutual purpose that benefits both sides. This is and always will be the model for new innovation to reach emerging markets that welcome their in-country talent participation.” Lou Calamaras, Director Client Solutions, CXC Global North America.
Shale Drillers Look Beyond Texas as Prices Rise
As Permian Basin experiences bottlenecks, companies look to fields in Colorado, North Dakota, Oklaho
Shale drillers are ramping up production in the U.S. as oil prices rise, moving beyond the West Texas oil field that became the countryâ€™s drilling center.
From Oklahoma to North Dakota, companies are increasing investment in oil fields that fell out of favor several years ago, as $70-a-barrel crude prices make fracking and horizontal drilling economical in more places again.
While the Permian Basin in Texas and New Mexico remains the fastest-growing shale spot, congested pipelines and shortages of labor and materials there are crimping profits, making other fields attractive alternatives.
EOG Resources Inc., EOG +1.25% one of the shale sectorâ€™s leaders, is active in the Permian but also in Colorado, North Dakota and Oklahoma. In Wyoming, the company has built up larger lease holdings and expanded production over the past two years.
Chief Executive Bill Thomas recently touted the â€œdiversified assetsâ€ of EOGâ€™s portfolio when discussing the companyâ€™s blockbuster first quarter, in which production rose 15% and profit surged more than 2,000% from a year earlier.
â€œLast year it was all about, â€˜How much can you put in the Permian?â€™ â€ said Daniel Romero, an analyst with the energy consulting firm Wood Mackenzie. â€œBut now, a few months later, itâ€™s what else are you doing outside of the Permian?â€
After oil prices plunged in 2014, shale drillers flocked to the Permian because it was the least expensive place in the U.S. to produce oil by fracking, thanks to existing infrastructure and oil-bearing rock stacked like a layer cake, which allowed better yield per acre.
The oil-rig count there more than tripled over the past two years, according to oil-field services company Baker Hughes , which tracks rigs as a barometer of drilling activity. Output surged to roughly three million barrels of oil a dayâ€”similar to the output of Kuwaitâ€”from just shy of two million barrels in early 2016, according to the U.S. Energy Information Administration.
But rig counts have been rising elsewhere, too, as prices have gradually recovered. The number of oil rigs in several basins outside the Permian has more than doubled over the same period, according Baker Hughes. The areas include North Dakotaâ€™s Bakken region, the Eagle Ford in South Texas, and the Cana Woodford in Oklahoma, home to fields known as the Scoop and the Stack.
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