Why I’ll Be Paying Closer Attention to the Onshore Oil Scene
Toby Shute submits:
Every Friday, Baker Hughes (NYSE: BHI) releases its estimate of the U.S., Canadian, and international rig count. Usually, I let these updates go without comment, as the weekly changes are small. The "big picture" trends only come into focus when you zoom out and look at months’ or years’ worth of data. I think I’ve done a good job of documenting one of these phenomena, but a poor job of alerting you to another. Something in Friday’s release really snuck up on me. I should have been paying better attention.
The first key trend is the dramatic shift from vertical to directional and horizontal drilling. Drilling in tight gas shales used to be thoroughly unconventional. Following the success of Mitchell Energy (acquired by Devon Energy (NYSE: DVN) in 2002) and others in the Barnett shale, however, it didn’t take long for shale plays to dominate the drilling landscape. Nowadays, it seemingly takes a contrarian to avoid the shale and granite wash plays that firms like Chesapeake Energy (NYSE: CHK) and EnCana (NYSE: ECA) are exploiting so eagerly.
Investing, Long Term Investment, stock market | admin March 16, 2010
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