HOUSTON -- After two years of severely low levels of E&P activity in North America, the industry is starting to see signs of life.
“Basically, we’ve seen our industry, here in America, come back from the brink of extinction,” said Harold Hamm, chairman and CEO of Continental Resources, at the Wednesday afternoon session of CERAWeek in Houston. “We have a great deal of potential in this country. We also have the potential to oversupply the market, and we have a great responsibility not to do so.” Hamm participated in a panel discussion on the future of North America’s E&P alongside R.A. Walker, chairman, president and CEO of Anadarko; and Jeff Ventura, chairman, president and CEO of Range Resources.
Hamm said Continental is focusing on completing DUC wells in the Bakken. He said the company currently has 185 DUC wells and six completion crews working in the Bakken to complete the wells. “We didn’t complete a lot of wells when prices went down to about $30, but we are back to doing that now. We’re glad we saved all those wells that can now benefit from the current technology we have,” he said, referring to the efficiency gains that the industry has seen recently in hydraulic fracturing.
The company also plans to ramp up its SCOOP and STACK operations in Oklahoma’s Woodford shale, he said. The SCOOP and STACK wells are the largest wells that the company has operated in its 50-year history, according to Hamm. “In the past, the technology just wasn’t there to harness this.”
At Anadarko, Walker said the company has shifted from its international approach to a more U.S.-centric strategy. The company’s core areas now include the Delaware basin, DJ basin and Gulf of Mexico. Anadarko plans to spend $16 billion in these areas through 2020, and the company already has spent $1.3 million on infrastructure build-out for its Delaware acreage, he said.
While costs are growing in the Permian, due to increased rig activity and pressure pumping activity, Walker said the company is working to offset service rate increases with better execution. “What we’re going to have to do is offset that when we move into development drilling, from pad drilling locations, be able to drive down costs per well through efficiency measures with the service community.”
Range Resources will be focusing on its core dry gas acreage in the Marcellus, Ventura said. “In my opinion, the futures price for natural gas is not adequately capturing [demand],” he said, noting that he thought prices around $3 MMbtu were too low. “To be clear, the U.S. does have an enormous amount of gas supplies, most likely 100 years or more. The key though, is that core acreage is limited, and the economics outside of the core are very different than within the core.”
“The Marcellus is the largest, lowest-cost gas field in the U.S. and combined with the Utica, it produces 23 Bcfd, making it one of the largest, if not the largest in the world,” Ventura said. Range has about 1.5 million acres in the region, he said. “We expect to be drilling for a long time with what should be a good future for natural gas.”