February 2012

What's new in production

After the glamour wears thin, come back to oil country

Henry Terrell / Contributing Editor

If you haven’t visited the Permian basin lately, it might be worth the trip, if only to remind yourself what an oil boom looks like. The area, which comprises West Texas and southeastern New Mexico, has had its ups and downs in the past few decades, but at the moment there is definitely an “up” in progress.

It’s no mystery why this is the case. The oil out there is still abundant, and the price of West Texas Intermediate (which, as the name suggests, is what they drill for out there) has spiked north of $100/bbl on occasion, and shows no sign of retreating. The rig count in Texas Railroad District 8 (which includes part of the Permian) is up over 50% from just a year ago, and is more than double the number from 2009.

A significant part of the story has been in workovers. Except for 2009, the number of rigs and crews working in that arid part of the world has stayed consistently high. It’s not particularly surprising—the number of wells, and the age of the fields, means there’s still a lot of oil to be recovered at comparatively modest dayrates.

I grew up in West Texas, and throughout my youth, the boom never seemed to stop. It was the 1970s, and growth was prodigious in those dusty towns (and if you’ve ever lived there, you know that’s not just a folksy expression; dust gets in your teeth). I was one of those who just wanted to escape and zoom off in a cloud, like the Roadrunner, to the big cities southeast. But a lot of my friends and acquaintances stayed and prospered.

One such high school friend, whom I will call Andrew, went to college out of state and then came back to West Texas after graduation. With partners and some family money, he bought a workover rig, hired a crew and started a small company. All in all, he was successful and expanded the operation over the next couple of years. However, Andrew harbored a dream of making it in another profession—the movies. But aside from college drama courses and some community theater, he had never gotten to indulge his passion.

Hollywood or bust. So about 1979, figuring he was still young and it was now or never, Andrew left the business in the hands of partners, packed up his wife and drove to Hollywood, determined to give his acting career two years.

From the start, he had no trouble at all landing small parts in films. I should mention that Andrew was a giant of a man. Tall, broad and muscular, with a rugged face, he was cast in many non-speaking roles as football player, leg-breaker, goon and “third bodyguard.” Speaking roles, however, were not forthcoming.

He wanted to be heard. All the voice training and drama lessons had to count for something. Andrew was a realist and knew that chances of being a star were slight, but he just wanted one good shot before he gave it up.

Time for your close-up. Finally, toward the end of his second year in Hollywood, he got a break. He was cast in a major film with an A-list star. It was only one scene and exactly two lines, but he was going to be allowed to speak! I recall that he played a burly bartender. In the days leading up to the scene, he rehearsed his lines over and over, experimenting with nuance and inflection. On the day of the shoot, as the director called for multiple takes, he threw all his practice and experience into the performance.

As the night of the big premier approached, Andrew could hardly contain himself. He had been assured by the studio that the scene had been retained in the final edit. When at last he was sitting in the theater with his wife and friends, he wondered if his big moment had finally arrived.

When the scene came, he was completely dismayed to find that his lines had been overdubbed—by someone with a deeply pitched voice and a strong English accent, no less. He saw his lips moving but a stranger’s voice coming out. It was a deflating moment. Andrew took it as a sign, and packed up and headed home to Texas, where he went back to working over oil wells and making a respectable living.  (Seeing the movie on tape years later, I had to agree it was disconcerting to hear Cockney from the mouth of a West Texas redneck. But it was still a great scene.)

Petroleum Man hanging on. Having survived another World Oil forecast process, I’ve had some time to reflect on what is changing in the oil business, and what stays the same. Just a few years ago, onshore oil production in this country was considered to be in its dotage. Peak Oil had come and gone, and from here on the new discoveries were going to be in expensive, hard-to-reach places—extreme environments, deep oceans, harsh tundra. As the British petroleum geologist (and Peak Oil theorist) Colin J. Campbell put it, “Petroleum Man will be virtually extinct this century, and Homo Sapiens faces a major challenge in adapting to his loss.”

The century is still pretty young, but I have a hunch that Petroleum Man may be with us awhile longer. If the price incentive is there (and it is), not only will the expensive offshore oil provinces be exploited—Shell’s Perdido development lies under 8,000 ft of water—but land rigs are rolling again, from North Dakota’s Williston basin to the Eagle Ford shale in South Texas. Technology is making it possible to develop these onshore oil provinces economically, and to get at the trapped oil left behind in the old ones. Out in West Texas, there are 200 more drilling rigs working today than there were last year, and 100 more workover rigs. In North Dakota, about 40 more rigs are working today than in December 2010.

So, if you can’t quite make a go of it in the movie business, you can always come back home. Only today it’s tough to find a room to rent.  WO

About the Authors
Henry Terrell
Contributing Editor
Henry Terrell henry.terrell@gulfpub.com
Related Articles
Connect with World Oil
Connect with World Oil, the upstream industry's most trusted source of forecast data, industry trends, and insights into operational and technological advances.