News from ShaleTech 2012: Swift Energy’s Vincent lists shale operating and regulatory challenges
BY KURT ABRAHAM
HOUSTON -- At today’s opening session of the ShaleTech conference and exhibition in Houston, keynote speaker Bruce Vincent told the crowd that “while this is shale’s time in the sun, oil and gas companies must also deal with the operating and political challenges of shale development.” A former chairman of the Independent Petroleum Association of America, Vincent is president and director of Houston-based Swift Energy. The two-day ShaleTech event is hosted by World Oil and its parent, Gulf Publishing.
Vincent said that like many medium-to-large independents, a significant share of his firm’s activity is shale-directed. In Swift’s case, that shale activity is concentrated in the Eagle Ford play of South Texas, where the company has boosted its liquids production 38%, while natural gas output is up 9%. In achieving these numbers, Vincent said that Swift has had to embrace several operating strategies. One of these is longer project lead times, which enables more precise, long-range project planning, improved workforce allocation, and improved facility and infrastructure utilization
A second strategy is to allow greater visibility for long-term financing, where assets can be matched to long term financing plans, and financial efficiency can lower the cost of capital. Last but not least, Vincent said that Swift uses a “resource factory business model,” whereby per-well capital costs decrease over time, operational efficiency improves as activity increases, and project productivity improves in the development mode.
Vincent said that 69% of his company’s drilling is now directed toward oil, with nearly 31% targeted to condensate. Less than 1% of Swift’s drilling is for natural gas. Regardless of the target, the firm has been able to reduce drilling times across-the-board, while also improving frac and completion efficiencies through better technologies and practices.
On the regulatory and political front, Vincent exhorted attendees to help the industry get the word out to voters about what is at stake on oil and gas policy in the November election.
He noted that the Obama administration continues to pursue anti-oil-and-gas policies, while the President also spreads inaccurate campaign rhetoric . For instance, while Obama repeatedly refers to oil as a “fuel of the past,” Vincent noted that it comprised 37% of U.S. energy consumption in 2010 and is likely to still account for 32% of energy usage in 2035.
In another example, Vincent said that “Obama touts an ‘all-of-the-above energy strategy’ that includes promotion of oil and natural gas development. Yet, the reality is that this administration seeks to limit development and access through regulation and legislation.” Prime evidence of that, said Vincent, is how the White House has pushed the EPA to impose ever-more-stringent regulations on emissions and water usage.