Shale Oil Well Tests That Spike Stock Seen as Misleading
This article is for subscribers only.
Tests done on new wells that boosted the fortunes of oil developers by billions of dollars during the U.S. shale boom are increasingly coming under scrutiny.
The one-day performance tests, which regularly spike company shares on their results, don’t provide enough data to predict future potential, according to a study by Drillinginfo, an Austin, Texas-based analytics and data firm. Additionally, few rules or standards govern the tests, industry observers say, making for inconsistent findings at best.