As land in West Texas’ prolific Permian Basin gets more expensive and harder to secure, oil companies are looking at the potential of other fields, from the Gulf of Mexico to Argentina.
“There are ‘sweet spots’ that haven’t really been tackled yet,” said Frank Patterson, executive vice president of Oklahoma City-based Chesapeake Energy Corp.
The big, easy oil fields have been found, he said, but that doesn’t mean other big finds aren’t lurking. “You just have to get good at what you do,” Patterson said at the CERAWeek energy conference in downtown Houston.
Royal Dutch Shell is finding success in the Montney formation in northern Alberta, the Utica in Pennsylvania, and in the Vaca Muerta shale field in Argentina, said Chandler Wilhelm, vice president of emerging basins for Royal Dutch Shell. The layers of oil and gas in the Vaca Muerta remind Wilhelm of the Permian.
And Houston Energy thinks its future is in streamlining offshore drilling, said founder Ron Neal. “I see the future of the Gulf of Mexico — the economics of the Gulf of Mexico — improving if you standardize,” Neal said. “You do not have to have a unique well head, a unique pipe for every situation.”
Neal said break-even costs have dropped into the high $20s per barrel.
Still, the Permian will be hard to match. Shell’s North American capital is still largely spent there, Wilhelm said.
“Finding another Permian,” he added, “will not be easy.”