Oil was written off. Now it’s the most productive US industry

In a remote and arid expanse of sagebrush country situated near the Texas-New Mexico border Oil was written off. Engineers at Matador Resources Co. encountered a significant challenge that threatened the viability of their drilling operations. The prevailing methodology in the oil industry typically necessitated the drilling of four separate wells. That would penetrate vertically into the ground before extending horizontally to tap into the lucrative layers of oil-saturated rock. This technique has been refined and optimized by the U.S. shale industry over the years.

It relies heavily on the ability to maximize the reach of each well to ensure profitability. However, the specific characteristics of the land in question—particularly its limited width—posed constraints. It would hinder the efficiency of this conventional approach, leading the engineers to seek alternative solutions.

The Dillema

In response to this dilemma, the engineers devised an innovative drilling strategy. It involves a U-turn technique. After initially boring vertically down to the shale layer, they expertly navigated the drill bit sideways. It is for an impressive distance of one mile, executing a precise curve before drilling back to the original vertical entry point.

This novel approach proved to be highly effective, enabling Matador Resources to extract oil with only two wells instead of the conventional four. The implication of this strategy was profound, as it effectively halved operational costs while simultaneously maximizing the extraction potential from the site. This breakthrough not only exemplifies the ingenuity of Matador’s engineering team but also underscores the ongoing evolution of drilling technologies in the oil industry, driven by the need for greater efficiency and sustainability in resource extraction.

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Source: Bloomberg

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