Shale Drillers and Companies: Looking Across Borders for Talent

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 sector’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 “diversified assets” of EOG’s portfolio when discussing the company’s blockbuster first quarter, in which production rose 15% and profit surged more than 2,000% from a year earlier.

“Last year it was all about, ‘How much can you put in the Permian?’ ” said Daniel Romero, an analyst with the energy consulting firm Wood Mackenzie. “But now, a few months later, it’s what else are you doing outside of the Permian?”

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 day—similar to the output of Kuwait—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 Dakota’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.