The Shale Revolution transformed the U.S. oil and gas industry operationally and functionally in the late 2000s and early 2010s, but the most significant changes occurred years later. Through the middle and latter parts of the last decade, E&Ps continued to improve their drilling-and-completion techniques and significantly increased production as they gained experience. This production growth was enabled by — or driven by, depending on the perspective — midstream companies’ aggressive efforts to build out the pipelines, gas processing plants and other infrastructure required to handle higher production volumes and exports. More recently, capital market constraints, the Covid pandemic and a looming ESG narrative have propelled the industry into the next phase of its evolution, highlighted by fiscal discipline, which delivers improved shareholder returns through managed capital spending. But how long will this stage last — and what’s next? In today’s RBN blog, we examine the energy industry’s maturation and the differences between this transformation and those in other industries.
A long decline in U.S. oil and gas production was stemmed and reversed about 15 years ago with the expanded — and increasingly successful — use of hydraulic fracturing, which opened up the source rock in shale to ease the release of trapped hydrocarbons (see Square One, Part 4). “Fracking” wasn’t new. Its roots can be traced back to 1865. But George Mitchell, the founder of Mitchell Energy & Development Corp. and patriarch of modern fracking, breathed new life into the industry by using hydraulic fracturing in the Barnett Shale, initially focusing on natural gas production. Later, the technique was used to spur crude oil production too.
Join Backstage Pass to Read Full Article
