Boom and bust cycles are par for course for traditional E&Ps. For gas-only producers, the booms never seem to boom quite as loud as oil booms and the busts, well, they seem to last a lot longer. For all E&Ps these boom or bust cycles hinge on the price of the underlying commodity which is the biggest driver of economic success or failure. E&Ps have to be vigilant to ensure operating costs are low and midstream contracts are favorable... After that, hold onto your hat and enjoy the ride! But does it have to be this way?
In North Texas, a Fort Worth Basin gas producer with decades of experience in the Barnett Shale was curious if they could buck this trend. This producer had gas wells that produced dry gas only, no NGLs or oil, and was fed up with the low price of gas the were getting. They reached out to 360 Mining to explore how In-Field Computing services could improve their gas netbacks while adding a second market for their gas in an uncorrelated commodity. This one-two punch put the power back into the hands of producer to choose the best market for their gas instead of going “all-in” on gas sales to the pipeline.
360 Mining engineered, procured, constructed and commissioned the producers' facility in less than three months. At the flip of a switch, the producer had a second market for their gas. Redirecting their gas from the pipeline to the In-Field Computing deployment resulted in an instant uplift in their realized gas prices increasing from $1.50 per Mcf to over $10 per Mcf. Leveraging In-Field Computing at the pad site gave the producer the option, to decide for themselves, in real-time, if they are better off selling gas or using it to mine Bitcoin.
The president of this company, who chose to remain anonymous, had this to say: "360 Mining helped us execute on a strategy that we had to see to believe. Seeing their operation in Tarrant County proved to us that Bitcoin mining in the oilfield was viable and 360 Mining was the team to help us do it. Having optionality in the oil patch is not common, but with 360's In-Field Computing Technology we are earning much higher realizations and have a natural hedge against the price of gas. Our once uneconomic gas wells are now highly profitable."
Today, this North Texas E&P Bitcoin mine remains the sole reason that they are able to produce their otherwise uneconomic wells. With a massive value prop in hand, this company is actively evaluating how they can roll out In-Field Computing more broadly across their gas portfolio.
