Wall Street valuations take a hit in the tall shadow of well interference issue.
Oil and Gas Investor
Seaport Global analyst Mike Kelly addresses Hart Energy's Well Interference Forum prior to the DUG Eagle Ford Conference and Exhibition in San Antonio. (Source: Steve Toon, Hart Energy)
Industry’s unawareness of the true impact of well interference in full field development scenarios across the U.S. unconventionals has led to some painful financial lessons across operator asset bases. Aggressive well spacing estimates fueled valuations that are now being adjusted downward as programs are failing to deliver on the full promise of the areas under development.
These well interactions are robbing resource across multiple well bores and prompting operators to upspace future unit drilling plans, which is having a finance ripple effect across all parts of the industry. Now that Wall Street has caught up to the problem, companies valuations are suffering.
Blake Wright joined Hart Energy in 2019 as senior editor for Oil and Gas Investor Magazine. Prior to joining Hart, Blake spent over 16 years at Upstream Newspaper, ten of those as Bureau Chief in Houston. He was also editor of the Gulf of Mexico Newsletter — an Offshore Data Services publication — from 1993 to1997. He holds a BS in Journalism from Texas A&M University.