North Texas

The Return of Fracking in the Barnett Shale?

From his home office in North Texas, Nick Steinsberger monitors his drilling operation.

He owns Valpoint Operating, an oil and gas company with a drilling rig in Oklahoma.

The area is so remote, you can't even see any houses.

"There's nobody to come and complain out here," he said. "The county seat is Arnett, which is about 20 miles away and the population is probably a thousand people."

It's not his top priority, but staying out of residential communities makes running his business easier.

Steinsberger and his team are fracking for oil, using the same techniques that Nick revolutionized, while pumping natural gas out of North Texas.

In the mid-90's, Steinsberger was a completion manager assigned to the Barnett Shale. And looking to cut costs, he tried something different.

"I greatly reduced the amount of gels and the chemicals that we were pumping," he said.  

Instead, he used mostly water.

"I wasn't laughed at," he added with a smile.

But his colleagues didn't hold their breath.

"The analogy is, as a kid, you play with clay," he explained. "We put a lot of water in the clay and it turns into a mucky gush. How are you going to get oil and gas out of that mucky gush?"

His first attempts failed, but he kept trying.

"I pumped a lot more fluid and I started with a little bit of sand and kinda ramped it up from there," he remembered.

Eventually it worked.

"It was hugely successful and it was by far, not even close, to the best Barnett well we'd ever had at that time," Steinsberger said. "That technique, to some degree, is used in every shale play in the world today."

Fewer natural gas wells are being drilled in North Texas today, but it doesn't mean they're not coming back.

"It's in hibernation," Steinsberger added. "There's over 20,000 Barnett wells drilled in the last 20-something years, but if the gas prices went up significantly, those rigs would start coming back."

Today the price of natural gas is $2.83 per million BTU.

Back in 2005, the price was $13.42.

The returns just aren't worth the millions of dollars it takes to drill new wells.
But down the road, new technology could lead to even bigger gains.

"I think the Barnett could come back and I could conceivably see where another 21,000 wells are drilled at some point in the future," Steinsberger added. "I think re-fracks in America, there will be a lot of them over the next 10 to 20 years, going back and re-fracking Barnett."

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