OTC: Higher cost of living hits oilfield companies, too

The oil and gas industry may love $100+ oil prices, but it is less fond of the higher and higher costs related to finding and producing crude oil. In a panel discussion this morning at the Offshore Technology Conference, executives from several different pockets of the industry compared notes for dealing with those costs.
One case study came from Timothy Parker, CEO of HighMount Exploration and Production, a subsidiary of Loews Corp. founded in July to develop assets in West Texas, Michigan and Alabama. The company is now drilling natural gas wells near Sonora, Texas, at 70 percent the cost it takes competitors to drill the same wells, Parker said. The company did it in part by focusing on efficiency.
“We’ve actually had people on our rig floors with stop watches,” Parker said, adding that such attention to detail can save up to an hour in operation time. “One hour may not sound like a lot, but it’s a big deal when you have 15,000 wells.”