Back in 2014 when we were too busy to think much about what we were doing and if we were doing it right, the industry drilled a lot of horizontal wells in the US land market that had lateral legs of about 5000’ or so. North Dakota had extended reach horizontal wells of 10,000’, but rarely were these ultra long wells found anywhere else.  

To drill a really long lateral, the oil company had to do a LOT of legwork upfront to assemble the acreage and leases, commit enormous funds to both drill and complete these really long laterals, and take on the massive technical risk of doing the project.  In 2014 we were generally too busy to do all that time-consuming upfront work, so only about 28% of the horizontal wells drilled in the US were the big, expensive, extended reach wells.

But the collapse of the industry in 2015 (and again in 2016) freed up a lot of time -- time to do the lease acquisition and time to do the engineering that would allow for maximum reservoir exposure of a wellbore. As the chart below indicates, the industry switched over to drilling very long horizontal wellbores and backed away from the shorter laterals:

The Mix Between Short Laterals and Very Long Laterals

Today, with drilling activity up and the length of laterals getting a lot longer, every well drilled is far more expensive than the boom days of 2014, when the price of everything was much higher.

Back in the olden days of 20 years ago, a company like Baker Hughes could not put its best and brightest engineers on US land wells because these land wells represented maybe $1M in potential sales to them, versus the typical international well that represented $10M or more in potential sales.  20 years ago the best and brightest were shipped to Europe and Asia and Africa and the Middle East. Today, however, with maximum reservoir exposure, the typical land well in the US represents $10M in potential sales to a company like Baker Hughes – as much as an international well – so the best and brightest are being brought to the US land market. It’s a reverse brain drain.
 
When the recovery comes in international drilling, those best and brightest will be busy in the US. Two questions: Will their commitments in the US slow down the international recovery? And, will they stay?