Thanks to new technological applications and continued benefits resulting from shale and natural gas resources, top exploration and production (E&P) leaders agree the current state of E&P is far better than it was a year ago.
"It's very good to see the industry in recovery," CERAWeek by IHS Markit Chairman Dr. Daniel Yergin said at the recent CERAWeek event.
Continental Resources Chairman and CEO Harold Hamm believes the United States oil industry is "on something of an equal basis today with OPEC."
"I think everybody realizes that we have a great deal of potential in this country," Hamm said. "We also have the potential to oversupply the market, and we have a great responsibility not to do so."
Anadarko Chairman, President and CEO R.A. Walker observed that while significant progress has been made in adopting new technologies, the oil industry lags behind Silicon Valley.
"There are a lot of things we can learn and catch up on the way in which the valley has advanced technology, whether it's machine learning and augmented intelligence to be able to read seismic in ways that we as humans can't or being able to use and process big data analytics along with artificial intelligence," he said.
Anadarko, he said, is "very committed" to applying more technological advances to its processes.
"We've created our own advanced analytics and emerging technology group, principally with some of our brightest folks internally, as well as externally hiring Ph.D.s and data scientists," Walker said, "so that we can understand how to use all this data that we have, but don't do that much with."
Range Resources Chairman, President and CEO Jeff Ventura agreed it is incumbent upon the industry to adopt more and newer technology.
"Our company is focused on trying to use technology or big data to help drive decisions for everything," he said. "There are big gathering systems and processing facilities where you can find space in the system on a real-time basis. To the extent you can do that, you'll end up with low-cost or free gathering, and you get the advantage of capital savings to drive real-time decisions. And it's hard for human beings to handle that much data and these big complex systems like that."
Technology is worth the cost
Hamm characterized the advantages inspired by new technological applications as "tremendous." Further, he said Continental Resources does not predict an increase in 2017 to overall costs "because we intend to offset any project increases with additional technological efficiencies."
Walker added there is no question costs are going up, particularly in the Delaware Basin, "because of the big activity, the completion crews and pressure-pumping services," and the cost per well could be driven down by applying technological measures to increase efficiency.
"I think the Delaware, and probably the Permian, is a little bit of an anomaly in that regard," he said. "We're not seeing the same service costs compression or pressure issues throughout the Denver-Julesberg Basin or throughout the Delaware."
"If you look at the rig count and the activity, a lot of it is in the Permian, so most pressure will be there, and a lot less so in Appalachia and in the other areas where we operate," Ventura noted, accentuating the positive role data-gathering technology plays. "To the extent we get more efficient with landing laterals and stage spacing, we can help offset some of that with more efficient use of data."
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