Inside a Patterson-UTI control room in Houston.
Photographer: Mark Felix for Bloomberg MarketsOil Was Written Off. Now It’s the Most Productive US Industry
Oil and gas extraction has seen the fastest labor productivity gains of any sector in the past decade.
In a dusty swath of sagebrush country near the Texas-New Mexico border, engineers at oil producer Matador Resources Co. encountered a problem.
Conventional wisdom called for drilling four wells into the ground and then horizontally to access layers of oil-soaked rock, a technical feat perfected by the US shale industry. But the plot of land was too narrow, limiting each well’s reach and likely making them unprofitable. So the engineers tried a novel concept: a U-turn. After boring vertically to the shale layer, they went sideways for one mile, curved the well around and then drilled back to where it began. It worked. Matador was able to pump the oil with two wells instead of four, essentially cutting costs in half.