Hart’s E&P: Last Word, Radical Efficiencies

Well, we’ve all done it. In response to the worst downturn in recent history, our industry has delivered unprecedented cost cutting. Collectively, we’ve reduced our workforce, made changes to employee benefit programs, closed and consolidated facilities, rationalized our footprint in markets that were no longer profitable, and requested significant discounts from our suppliers to help us weather the storm. And in the aftermath of all that carnage, we are awaking to the fact that our recovery plans fell short of, well, recovery. Yes, the prospects of a market recovery seem to be a bit brighter today. So now what? Are we poised to do something different? Let’s put our ears to the wall and listen to the industry chatter in earnings calls and investment conferences to see how things are changing: Operators have substantially lowered well construction costs, but the truth is that the vast majority of that improvement came from service price deflation based on oversupply and lack of demand; and Listen to the…

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