American Oil and Gas Reporter - April 2018 - 81

AMERICA: THE ENERGY SUPERPOWER
cellent opportunities to keep smaller independents active for years.
Meantime, larger independents will
remain the dominant players in the established shale plays. We are seeing the
rise of the pure-play specialist in the Permian and Appalachian basins. There is
some question as to whether these pureplay basin masters will become the commercial masters, which may drive further
consolidation post-2020, but it should
be, more or less, business as usual for
the big players in the big plays.
The Permian provides a good microcosm of the overall trends. There are
some 600 operators active in the basin.
That is related to the fact that when the
majors exited 20-30 years ago, the independents moved in and acquired parts
and parcels of their holdings. The larger
independents are leading the way in the
Wolfcamp, Bone Spring and other plays,
but the majors and super independents
are coming back with Chevron, ExxonMobil and Occidental each announcing
multibillion-dollar investments.

However, while it does not make the
news, a significant percentage of all horizontal wells drilled in the Permian have
been outside the shales in tight conventional formations such as the San Andres,
Clear Fork, and Abo. These off-the-radar
plays are yielding additional hydrocarbons
and boosting EURs in and around the
main shale fairways.
In the final analysis, the rise of resource
plays and the improved economics of
developing these reserves has reset the
oil and gas business in very positive
ways. North America has more than 1,100
trillion cubic feet of estimated economically recoverable gas reserves at a commodity price of less than $4 an Mcf. The
same thing is happening in oil reserves.
This is critical to the long-term sustainability of oil and gas. Affordable prices
and reliable supplies will keep oil and
gas competitive with other energy sources
far into the future, and that is one of the
legacies of lower-48 resource plays that
transcend short- and intermediate-term
market conditions.

For instance, in the race between natural
gas and alternative fuels in power generation, and between oil and electricity for
transportation, efficiency and cost-effectiveness will be of paramount importance.
The U.S. companies that figured out how
to economically produce from shales and
tight rocks, and then pushed into new
productivity and efficiency frontiers during
the downturn, have made the oil and gas
business viable for decades.
r
Editor's Note: As Pete Stark prepares
to retire from a long and productive
career, AOGR's staff extends its sincere
gratitude to Pete for his invaluable contributions to the magazine over the years.
Few industry thought leaders have provided more insights to help AOGR's readers understand market and technical trends.
AOGR Publisher Charlie Cookson adds
his personal thanks for helping him make
it through the rigors of Colorado State
University 40 years ago. Happy trails,
old friend!

Philip H. "Pete" Stark is executive director, upstream research (emeritus) for IHS Markit
in Englewood, Co. Prior to joining IHS in 1969, Stark was an exploration geologist for Mobil
Oil. Stark has authored papers on a range of upstream topics and technologies, and co-authored studies on North American gas supplies, unconventional gas supplies, North American
and global tight oil, and global superbasins. He holds a B.S. in geology from the University
of Oklahoma and an M.S. and Ph.D. in geology from the University of Wisconsin.
PHILIP H. "PETE"
STARK

Bob Fryklund is vice president and chief strategist for IHS Markit's upstream energy
group. With more than 38 years of industry experience, he joined the company in 2006 after
serving in various geologist and leadership positions with ConocoPhillips, British Borneo,
Union Texas and Amerada Hess. Fryklund has published numerous articles and frequently
speaks at conferences and events. He holds a degree in geology from Hamilton College and
has completed advanced studies at the University of Houston and the University of Tulsa.
BOB
FRYKLUND
APRIL 2018 81

American Oil and Gas Reporter - April 2018

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