Change in Practice

Change-in-Practice

Executive Summary

Barnett Shale drilling activity has vastly declined since its peak in 2008. “The decline in Barnett Shale drilling can be attributed to several factors. The industry has rushed to shift resources to areas that produce crude oil, like the Bakken Shale in North Dakota and the Eagle Ford Shale in South Texas, which sells for higher prices than gas. And other shale gas fields, like the booming Marcellus Shale, have surpassed the Barnett in daily production, further pushing the 30-year-old North Texas fields into the background” (Star Telegram 26 Dec. 2013). In 2009 my company XTO Energy Inc., a subsidiary of Exxon Mobil, had 28 drilling rigs running in the Barnett Shale. Last year we dropped down to one drilling rig and have remained at one rig.

Jim Fuquay stated, “ Last year, citing official Texas Railroad Commission and Powell Shale Digest figures, we said the big North Texas natural gas field dipped below 5 billion cubic feet in June 2013, which would have been its lowest production since December 2009” (Star Telegram 4 June 2014). XTO under the direction of Exxon has shifted its attention from dry gas plays such as the Barnett to more liquid rich plays like the Permian. Exxon along with other oil and gas companies has made this shift because the price of natural gas is low while the price of oil is high. It is more economical to drill for oil than it is to drill for gas. According to Jim Fuquay, “Producers for several years have been looking for crude oil and natural gas liquids, which attract much better prices than dry natural gas” (Star Telegram 18 April 2014).

Due to the lack of drilling in the Barnett Shale, many of my co-workers have been moved to support the rise in demand from crude oil plays. Those of us who are left working the North Texas play now have to share office space with the ever-growing Permian Basin group. With the Permian group sharing our work environment, now would be an optimal...