The West Texas Intermediate is down 59% from three years ago, sending unwelcome shockwaves through businesses that make a living from oil. Surprisingly, however, drillers have proven themselves highly adaptable.
Before prices cratered, shale drillers needed oil at $80 a barrel simply to break even. Today, many manage to get there at $60, $50 and even $40. Many businesses are showing their highest profits of the past two years. WPX Energy, a major shale producer in the Permian Basin, is bringing multiple new rigs online this year; Occidental is maintaining spending plans. The industry has returned to a familiar path of growth.
Adaptability, Improvement Are Key to Survival in Today’s Environment
How they’ve done it is hardly familiar, and not everyone has managed it. Dozens of producers and field service businesses have filed for bankruptcy over the past two years. The secret has been both adaptability and an aggressive push towards improvements in operational efficiency.
Drilling contractors achieve efficiency improvements in a number of ways. One driller in the Gulf of Mexico has reportedly cut down on inefficiency 19% through improvements brought to the supply chain. Another has achieved a 16% savings on D&C by having drilling experts implement improved, cost-efficient technologies.
The innovations offered by Sigma Drilling Technologies are a case in point. Our high-tech pulsation dampeners and pulsation control equipment have technology that helps contractors lower the occurrence of incidents and greatly improve reliability.
Investment in new technology may hardly seem the right direction to head in, in times of falling prices. Nevertheless, investment in efficiency has proven time and again over the past decade to give drilling businesses the flexibility that they need. Give Sigma a call today at 281-656-9298 to find out more about our products with a free demonstration.
