Forbes Piece: How One Contrarian Company Thrives In A Shale Oil And Gas World

Marcellus Shale gas wells site in northern Pennsylvania. GETTY

[Note: This story is also published at Forbes.com]

Diversified Energy is one of the most interesting upstream companies in the oil and gas business these days. Its stock is traded on the London exchange, yet all its operations are in the U.S. The company’s operations are mostly in Appalachia and in the Texas/Oklahoma/Louisiana region, yet its CEO and much of its management staff are in Birmingham, Alabama.  

Where most of the domestic U.S. industry has focused in recent years on developing the country’s array of prolific shale oil and gas resources through the deployment of horizontal drilling wedded with big hydraulic fracturing operations, until recent years, Diversified’s operations had focused almost exclusively on the acquisition and refurbishment of vertical wells in conventional formations in the Appalachia regions of Pennsylvania and West Virginia. Where most upstream companies rely on maintaining and increasing their production by drilling many new wells each year, Diversified’s contrarian strategy relies on acquiring wells late in their production lives and deploying what the company calls its smarter asset management protocol to them to squeeze extra production from them, while drilling no new wells except in isolated circumstances.