Two places that illustrate the mounting challenges facing the shale business are the Bakken Shale in North Dakota, where the number of working rigs is one-third what it was a year ago, and the Fayetteville Shale in Arkansas, where there are no more working rigs.
Steve Mueller, the outgoing chairman of the board and former chief executive officer of Southwestern Energy, the company that discovered the Fayetteville Shale, noted how the current environment has made it harder to drive innovation forward even as it becomes more important than ever.
“How in the world do I learn at the speed I was learning at before when I am not drilling as many wells, when I am not doing as many fracs, and when I don’t have as much money?” he said. “And the conclusion I come to is that we have got to do it a different way and we have got to do it a lot faster.”
Mueller spoke in February before a room of engineers and service providers at the SPE Hydraulic Fracturing Technology Conference in The Woodlands, Texas, where some of the innovations spurred by the need to change were presented. But because so many companies have laid down so many rigs, it will take a significant price recovery before the latest advancements and efficiencies make a big impact on the shale sector.
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A good example of a company executing a strategic retreat is Hess Corporation. In 2014, the company had 17 rigs running in its Bakken program.
