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Energy Insights: Energy News: Oil group’s chief hates the ‘F word’

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Oil group’s chief hates the ‘F word’



By Ed Crooks

Harold Hamm hates what he calls “the F word” – fracking.

Not the technique itself: hydraulic fracturing, to give it its proper name, is an essential procedure for Continental Resources as it extracts previously inaccessible oil from the Bakken shale of North Dakota and similarly challenging rocks in Oklahoma.

It is the word “fracking” Mr Hamm objects to: in particular, the way that it is widely assumed to be the practice that is solely responsible for driving the shale revolution.

“We’ve been fracking wells for 60 years, since before I started in the business. That’s not the reason,” he says.

“There was one thing that did this, and only one thing, and that’s horizontal drilling. The deal is being able to lay a well-bore out there for 9,000 feet, in rock that wouldn’t produce vertically, but will produce if drilled in this fashion.”

Horizontal drilling – sending a well a mile or two straight down, then around a corner and a mile or more sideways – opens up more of an oil or gas-bearing layer of shale than a traditional vertical well. With the help of hydraulic fracturing – pumping in millions of gallons of water mixed with sand and chemicals at high pressures to crack the rock – horizontal wells will release enough to make production commercially attractive in areas where it had not been viable in the past, so long as the prices of oil and gas are high enough.

Continental Resources was not the first company to combine the techniques in this way: that was Devon Energy, which began fracking horizontal gas wells in the Barnett Shale of north Texas in 2003 after buying the company owned by George Mitchell, the visionary pioneer of shale production who died this year.

However, Continental was one of the first to appreciate that the approach that had been spectacularly successful in shale gas reserves could also be effective in the more challenging shale oilfields such as the Bakken.

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