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There were several interesting themes that ran through many of the conference calls of major energy companies during the second quarter. One that stood out as standing on the precipice of becoming a major trend is the refracturing of previously fracked oil and gas wells. It could really become a big driver for companies if oil stays lower for longer, especially with some of the innovative options being offered by Schlumberger (NYSE:SLB)and Halliburton (NYSE:HAL).
Weighing cost and return
One of the problems with refracking, at least at the moment, is that refracking horizontal wells is a new trend and not yet perfected, so that adds a layer of risk. Furthermore, it costs money, which is tight in the industry right now. This was something that Chesapeake Energy (NYSE:CHK) addressed as the company went into a lot of detail on its call on refracking, including the extra costs. According to Jason Piggott, EVP of its Southern Operations, on a basic level «they're typically in that $1 million range,» though he noted that there is an incrementally more expensive option that has yielded even stronger results.