With the natural gas market threatening to mount a comeback, our industry could be in for yet another major shift. The shale gas revolution has gone through several stages already with the skeptics and promoters each being right about certain aspects of the plays. The shale revolution in natural gas was brought to us almost exclusively by the introduction of a disruptive technology, the first multi-stage fracture stimulations.

We all know what happened next, with short term storage filling up for several winters due to the prolific initial production rates from these shale gas wells and the rush to drill and hold lands. That combined with the lack of markets for the industry’s gas outside the reach of our pipeline networks lead to the price collapse which ensued. Natural gas fell significantly out of favor as it has done before with deregulation of market in the 1980’s.

Looking back to before the days of shale gas and the common thinking that conventional gas projects, which relied on higher and higher pricing, would be the way of the future. Coal bed methane producers were chided for using prices above $7 mcf in their economics. But with spot prices at the time they could claim to be conservative with their estimates. Fast forward a few years and it is hard to imagine how we once thought that way.

As an industry we are of two minds when it comes to natural gas. The oil sands producers use it as an input, and the conventional producers see it as an end product for sale. These two mindsets are diametrically opposed and speak to the struggle we will continue to have in maximization of our resource base. One example that comes to mind is Steam Assisted Gravity Drainage oil wells, which have done very well, while natural gas prices lagged. A resurgence of natural gas prices will surely strain the recent economics of this type of project.

At Pajak Engineering, our clientele direct the type of wells we work on. These well types have changed with the changing times and our gas focused clientele are requesting assistance with increasingly challenging deeper drilling projects targeting liquid rich plays which serve to offset the economics of the natural gas itself.

As the market drives to more and more complex wells, it appears the days of drilling swaths of inexpensive dry shallow gas wells seems far behind us. However, the perfect storm of circumstance could change the industry yet again to revitalize shallower plays which have not seen as much activity in close to a decade. Having served the industry for nearly 50 years Pajak has seen the industry change many times, and has a history of adapting well. Some things remain constant however, such as our commitment to integrity, good oilfield practices, and the safety of our personnel.

Whether the next big change comes fast or slow, it is sure to come. As it stands now it would appear that economic forces rather than technological change are likely to cause the next major shift in where we focus as an industry. Regardless of the timing, we at Pajak will be sure to stay ahead of the industry trends to aide our clientele with their toughest drilling and completions projects.