Oil companies produce more for less as crude prices fall

Fuel Fix ^ | November 30, 2014 | FuelFix.com

[thackney]

Despite dropping oil prices and reduced capital budgets, some companies are saying they expect to produce more oil next year.

They’ll do it by focusing on the best parts of shale plays, and by taking advantage of continuing improvements in drilling and completion methods.

Houston-based independent Halcón Resources, for example, says it will deploy half as many drilling rigs as originally planned, but still expects to pump as much as 20 percent more oil.

Crude prices have fallen more than 30 percent since June, and plunged farther last week after the Organization of the Petroleum Exporing Countries decided not to squeeze production in hopes of boosting global prices.

U.S. benchmark crude closed at $66.15 on the New York Mercantile Exchange Friday.

But costs are falling too. Two-thirds of oil officials surveyed by consulting firm Deloitte in October said shale drilling has become more economical, thanks to improved efficiencies and new rig technology.

Companies are using sophisticated data to tailor the amount of water and sand they pump underground to get better results from hydraulic fracturing.

And they’re using mobile rigs to drill multiple wells from platforms called pads, which reduce the time and expense of moving rigs and crews to different project sites, said Jonathan Garrett, a senior analyst at Wood Mackenzie.

[Sequoyah101]

More like ‘65-73
‘79 slump
‘82 fall
‘86 to ‘94+
‘98
‘08
‘14-17

[familyop]

"Despite dropping oil prices and reduced capital budgets, some companies are saying they expect to produce more oil next year."

That's an A okay business strategy. Go for it!

;-D