Shale Oil: Innovation Continues
By Shawn Reynolds, Portfolio Manager, VanEck
As the price of oil has swooned over the past year and a half, innovation has continued to provide a refuge for the strong.
Together with prime acreage, companies with cutting edge technology have proved themselves to be the survivors. But increased efficiency and, thus, higher returns and lower costs are still vital – not only for survival now, but also, and just as importantly, for the future.
Alongside already-popular «efficiency» menu items such as longer stages, closer clusters and greater concentrations of proppants, we are now also seeing other such menu items as «zipper fracks» and diverters, together with refracking, artificial lift (employing gas and pumps) and even workovers.Despite cuts in spending, leading producers have been able to increase initial production rates often without substantially raising costs: a necessity for survival and a recipe for success when the market turns round.
A «Zipper Frack»
Source: VanEck Research
About the Author:
Mr. Reynolds joined VanEck in 2005 as senior analyst focusing on energy, and currently serves as portfolio manager of VanEck's natural resources strategies. Prior to joining VanEck, he was employed at Petrie Parkman & Co. as an energy analyst covering U.S. oil and gas exploration and production companies. From 1991 to 2001, Mr. Reynolds covered North American, European and global energy companies out of New York, Australia and London with Goldman Sachs, Lehman Brothers, and Credit Suisse First Boston. Prior to his career in finance, Mr. Reynolds worked at Tenneco Oil Company from 1987 to 1989 as an exploration geologist.
Mr. Reynolds received a bachelor's degree in engineering from Cornell University in 1985, a master's degree in petroleum geology from the University of Texas, Austin in 1987 (Phi Kappa Phi), and an MBA in finance from the Columbia Business School in 1991 (Beta Gamma Sigma). In 2000, he was chosen as The Wall Street Journal's «Best on the Street» for E&P stock selection, and was recognized as «Best Up and Comer», E&P Sector, for Institutional Investor magazine's 1999 All-America Research Poll. Mr. Reynolds has also authored several technical geology articles published in periodicals such as the American Association of Petroleum Geologists.
The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions or its affiliates.