The shale industry keeps surprising us with its resilience, to the point where maybe, just maybe, we ought to start expecting these new innovations. Earlier this week we brought you walking rigs, and today it’s a new “super-sizing” technique that’s allowing shale producers to crank up the output even with oil solidly below $50 per barrel. The WSJ reports:
The trick is applying supersize versions of the horizontal-drilling and fracking techniques that worked successfully elsewhere to an area that hasn’t seen this approach yet. The gains come from extending the lateral portions of wells by thousands of feet and pumping them full of enormous volumes of sand, chemicals and water to flush out more hydrocarbons.So far, the impressive results have been confined to a small area in a single Louisiana parish near the Texas border. But if the approach works across the giant Haynesville Shale, which spans 120 miles across both states, the era of low American gas prices could extend for decades into the future, experts say.“There’s a large likelihood that the United States will be enjoying very low gas prices for a very long time, maybe 20 years,” said Mark Papa, who has monitored Haynesville developments as a partner at Riverstone Holdings LLC, one of the biggest energy-focused private-equity firms in the U.S.
True, America’s rig count has dropped significantly this year, in part a reflection of the competitive market conditions brought on by the dropping price of oil. But the productivity of the rigs that remain continues to grow thanks to innovations like those being deployed in the Haynesville Shale. The industry is therefore a lot healthier than a simple perusal of the rig count might suggest.