Fracking 2.0: Shale Drillers Pioneer New Ways to Profit in Era of Cheap Oil.
Brian Tapp is a geologist for EOG Resources, a little known Texas company. Using a proprietary app called iSteer, he dashed off instructions to a fracking drilling rig 100 miles away. This tool is among the reasons EOG pumps more oil from the continental U.S. than any other producer.
U.S. shale drillers transformed the energy industry over the past decade by using hydraulic fracturing and horizontal drilling. In the early days they used brute force to unleash a torrent of oil and gas. This altered the balance of power among oil-producing nations. Furthermore, they triggered a global glut.
Now, with oil currently trading near $50 a barrel, these producers are trying to unleash fracking 2.0. It is the next step in the technological transformation of the sector. As a result, they are extracting oil even faster and less expensively. The aim is to eke out profits even at that low price.
The promise of this new phase is potentially as significant as the original revolution. Most important of all, if more producers can follow EOG’s lead and profitably ramp up output from shale drilling even at lower prices, the sector could become a lasting force that challenges OPEC’s ability to control market prices.