While breakthrough success is often paved by the rapid adoption of cutting-edge technology, sometimes it simply pays to hang back and exploit opportunities ignored in the rush.
Fort Worth, Texas-based Athlon Energy applied a similar strategy in the Permian Basin, the West Texas shale play and top-petroleum-producing region in the U.S. While oil and gas companies were rapidly adopting expensive new technologies such as hydraulic fracturing and horizontal drilling, Athlon was quietly picking up Permian acreage thought unsuitable for these new technologies for pennies on the dollar. It then scooped up traditional vertical drilling rigs at discount prices. Net result: a deep inventory of some 3,900 vertical drilling sites and more than 10 years of drilling inventory.
The assembled value was so attractive that Calgary-based Encana Corporation snatched up Athlon for $7.1 billion in a “transformational acquisition” finalized in November. Innovation sometimes means seeing the conventional with fresh eyes.
