Exceptions remain, but that thrill of striking a gusher is fading as the oil sector transforms from a roving gambler to a manufacturer that runs night and day – including weekends – to churn out petroleum as quickly and profitably as possible.
“It’s not a function of ‘Will this well pay out?’ It’s ‘How can I pay out faster and more efficiently within cash flow?’ ” said Dale Redman, co-founder and CEO of Midland-based ProPetro.
The 12-year-old company went public last year while growing faster than any other Texas fracker or, more formally, hydraulic fracturing company.
As the head of a public company, Redman is well aware that shareholders, particularly after the two-year oil bust, demand profits and free cash flow, not freewheeling spending for the sake of just increasing production.
Everything is becoming more efficient. Fewer rigs are required because modern drilling rigs can drill more wells faster and longer. The increasing automation and use of robotics mean fewer people in the oil fields.
With a shortage of experienced and skilled workers to fill out fracking crews, companies increasingly want to lean on new technologies. They’re using U.S. shale fields to experiment during fracking as they inject the slurry of water, chemicals and sand that fractures the shale rock and releases oil and natural gas. The trend is to use much more sand and water while executing more fractures per foot.
The fracking industry leader, the Houston oil field services company Halliburton, is investing more in well diagnostics using fiber optic cables, pressure measuring and other tools. The company is trying out different chemistries in an effort to improve the flow of oil.
Still, only about 30 percent to 40 percent of the fractures contribute to the oil flow, so there’s lots of room to improve, said David Adams, Halliburton senior vice president for completions and production.
Patterson-UTI Energy, a Houston driller and fracker, has invested in a nationwide sand-tracking system to keep tabs on all the trucks and rail cars delivering sand to its sites in West Texas and Oklahoma, as well as the natural gas fields in the Northeast. That way the company doesn’t lose money waiting on sand deliveries.
“We call it the Uber for sand,” Patterson-UTI chairman Mark Siegel said.