They way I see it, we have opened another source, previously unavailable, of hydrocarbons (Oil and Gas). If we have done so well with this newly tapped bonanza that we have rendered further development uneconomical, that is a self-correcting situation. The markets will eventually adjust to that breakeven point and beyond. Such is the cyclical nature of the industry.
This is/was my second oil boom in the Williston Basin, although I benefited from the tight gas tax breaks with more work, and some other odds and ends, and as ever, exploration. To some extent the Red River B horizontal well drilling boom here (localized as it was) was of benefit, too, both in developing skills and techniques important to the development later of the Bakken and Three Forks. Horizontal drilling was well established here long before the Bakken boom, and I'd been working horizontal wells since 1990.
No more than the vertical well is the 'shale' exploitation going to end. Both have their place where appropriate and are just more tools in the box for extracting oil and gas.
When we started drilling Bakken horizontal wells, the wells were hitting payout in 6-8 months, (2000-01, in Elm Coulee Field, Richland Co, MT) Production was great, costs were relatively low, and the price of oil had yet to spike. With the speculation in oil came higher prices, with higher prices came higher costs. Royalty rates on leases went from the then standard 12.5% (1/8) to 20%, and the cost to lease an acre of mineral rights went from under ten dollars to later over $5,000.00 in the 'hottest' areas of the Bakken Boom over in ND.
If you bought in early, your potential profit was much greater, and the first oil company I worked Bakken Horizontal wells for sold to another, larger oil company, which in turn, was snapped up by a major, but only after prices and expenses had gone up significantly.
You don't have to be a financial genius (more the focus of Forbes than just the nuts and bolts of extracting oil) to figure out buying high, selling (oil) low is a hard way to make a profit, nor that the people who do best in any boom environment are the ones who get in on the ground floor. In every sector, from mineral rights to real estate to services, those who had the stuff where it needed to be and had bought it before the boom or early in the cycle did the best. They locked in their profit somewhere along the curve and walked away or rolled the money into The Next Big Thing, hopefully on the way up.
Is the current environment one where there are killings to be made? Only if you come up with the new tech that will enhance or improve production at a cost that works for the current market, or has a price trigger that will allow it to be implemented that is close to market conditions, and implemented at a net gain, financially. Or if you find another, cheaper, higher payout resource to tap.
This is the real, smelly back room aspect of oil production, the funding, and that is what Forbes would look at, from the investor standpoint. If there are other sectors of the market that offer higher profits, I would expect the investors to shift and cut in that direction, like schools of fish seeking food. The ones who get there first will get fatter with less effort than the ones who follow, such in the nature of things. While that boom of ready capital may dry up, too, there will still be savvy investors, who in a contrarian bent will invest in oil for the long haul. Much of that will depend on the decline curves of the assets in question, as to whether an investor would see a potential long term profit, and whether the asset would remain in production at profitable levels long enough to benefit from the next cycle. We may be a little early in the cycle for them to come popping out of the woodwork, but they will be there. These are the people who will buy low, in the hopes of selling high. Within the big picture, DUC wells are an asset, but tend to keep the price stable in that there is oil ready to tap, already drilled, if the demand goes up or the supply currently in production falters. (Ignoring the effect of geopolitical forces on the market and supply, which could cause prices to spike).
For those of us more concerned with OUR market, with producing oil and being employed, if not enriched thereby, yes, shale plays will remain an option. In some places at certain market parameters, geological parameters, and given the engineering and other challenges of that environment, there will not only be oil there to produce, but oil that can be produced at a profit significant enough to justify the investment in a well, a development program, and the production infrastructure to take the product to market.
That is never without risk, and unless the use of outside capital can be justified to expand, initiate, or otherwise develop that, with the costs of capital factored in and leave something for the stockholders, maybe it is better to self-fund, retire debt, and quietly develop for when the price goes back up. Because it will. It is only a question of when.
