With the oil and natural gas industry upbeat about sustained growth, the newest oilfield technologies are now beginning to make a dramatic difference, according to a report by Raymond James.
Analysts commenting on the recent Offshore Technology Conference in Houston said one of the key focuses in technology improvements over the past several years has been on improving efficiency in all aspects -- to make them faster, longer lasting, cheaper and better performing.. "This has been particularly important, given the smaller pockets of reserves, limited rig availability and generally high dayrates," said analysts."It appears as if some of these technologies have begun to make a dramatic difference, just over the past couple years."
Despite a trend toward deeper, more difficult wells, "better drilling technology has translated into increased total footage drilled per rig per year." Average footage drilled per rig has increased 12% over the past five years, said analysts. And total footage drilled also is increasing, up 10% in 2004 and up 100% from a few years ago. "Clearly, advances in drilling have provided a benefit to both contractors and operators as contractors are able to charge higher dayrates for better technology and operators are willing to pay higher dayrates to more quickly and efficiently monetize their prospects."
Raymond James analysts noted that the oil patch is "very slow" in adopting revolutionary technologies because "while advancing technologies will drive superior long-term performance, most of the new technologies highlighted...will have little meaningful earnings impact on our companies over the next year."
Analysts also noted that the industry outlook is upbeat. "The larger number of attendees and the positive mentality at the conference sends a signal that most in the oil patch believe we are in a sustained long-term shift toward higher activity levels."
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