Horizontal Drilling and ZIpper Fracs has opened up so many onshore low risk opportunities that the need to drill in deep water with associated risks and high cost is gone. This technology is just beginning to be applied to tight low perm formations in the Middle East and Africa. Russia will soon follow suite with application of this technology. We have fifty years or more worth of opportunities in just the lower forty eight states alone. It appears that higher declines with more drilling required will be the future norm. Abundant oil and gas will keep prices in check but not depressed as coal is phased out. A few offshore development may continue in some locations but only where infrastructure already established and opportunities are abundant and risk and costs are low. This development does not fit our business plan and we will have to reinvent ourselves. The question is do we have time and funds to survive?
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the same sentiment was recently given by one of the big deepwater players in downtown Houston.
deepwater is too much risk and barely breaks even
unconventional is 1.5-2x return and very low risk
Higher declines and more drilling and re-fracturing and re-fracturing and re-drilling and re-fracturing means that this technology is very labor intensive = expensive. Slack off for a few quarters and you loose it. That's why this is a death spiral in a down cycle.