Problems Crop Up in America’s Crowded Oil Fields

Shale basins here in the United States are busy places these days. Oil and gas producers are busy installing wellheads and drilling out multiple horizontal wells from each rig that can extend for miles, laterally. That’s becoming a problem, because as the WSJ reports, some of these horizontal wells have been striking other vertical wells:

The emerging problem is known as a “frack hit,” and it has flared up in Oklahoma, where a group of small oil and gas producers say more than 100 of their wells have been damaged by hydraulic-fracturing jobs done for companies like Chesapeake Energy Corp., Devon Energy Corp. and Newfield Exploration Co.

James West, an analyst with Evercore ISI who has been following frack hits, said they are of special concern in places like Oklahoma and Texas, where those drilling new wells must navigate around older wells drilled over decades.

“It’s becoming a pretty sizable issue,” Mr. West said, noting that Colorado in 2013 enacted regulations after state engineers had identified frack hits as a potential problem. “I suspect every basin is probably facing the same type of challenge.

The oil industry has a long history of dust-ups between producers, and this isn’t the first time a new well has been accused of damaging an existing one. But the nature of shale drilling—that, deep underground, these wells extend horizontally along productive seams of shale rock—makes it more likely for a new drilling project to run into another well. And, as more and more companies flock to a particularly productive part of a shale basin, we can expect problems like these to increase.

This isn’t an existential issue for fracking (sorry greens), but it is one worth keeping an eye on.

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