Technology At Work: Astonishing Statistics On Oil And Nat-Gas Drilling
Technology is not just at work in medicine, finding new ways to diagnose and treat diseases. It is not just at work in the field of computers, making them faster and easier to use. It is not just at work in agriculture, genetically modifying any and all sorts of plants to make them hardier, grow faster, use less fertilized all to increase yields/acre at a stunning and consistent pace. Technology is at work in the oil and gas business, driving down the cost of finding energy in more places and more often . It is truly amazing and so few of us are paying attention to this fact.
Consider Chesapeake Energy... once run by one of the true giants of the industry, now deceased, our friend Aubrey McClendon... and its costs of production. According to The Wall Street Journal, in the coming year Chesapeake will spend what still seems to us to be a "king's ransom" of money... $1.75 billion to produce about 650,000 new barrels of crude or crude equivalents each day. However, back in '12 Chesapeake… a mere four years ago… spent $14.7 billion to produce the same amount of crude oil. That is astonishing.
Further, it is not just the cost of producing that much crude that has fallen; the numbers of people required to produce that same amount of crude has fallen by 70%... from nearly 12,000 employees to 3,500 presently.... over that same period of time and it is finding that crude and/or crude equivalents and/or nat-gas on half the amount of land needed only five years ago.
This is Saudi Arabia's and OPEC's worst nightmare: that US oil and gas explorers are THAT much more efficient than Saudi Arabia and OPEC's explorers are and that the US explorers and drillers are every year, every month, every week and every day more efficient than they were the day, the week, the month and the year before.
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