American Wildcatters Are Chasing Oil Again, From Venezuela to the Arctic

American oil companies are rediscovering an old habit. After roughly two decades pouring nearly all their exploration money into domestic shale, major producers and independent operators alike are shifting resources back toward genuine frontier drilling, chasing prospects in places like Venezuela, the United Arab Emirates and Alaska's remote North Slope.

The bet that started at a desk in Houston

Ezra Yacob's path into the industry began somewhat unusually, working as a volcanologist for the United States Geological Survey before joining Houston based EOG Resources in 2005, right as the shale revolution was getting underway. Now EOG's chairman and chief executive, Yacob has steered the company's frontier ambitions overseas, into wells in the United Arab Emirates and Bahrain that he says are outperforming expectations in Abu Dhabi. He has been notably more cautious elsewhere, describing a possible return to the Gulf of Mexico as a heavy lift and saying Venezuela is not yet compelling enough for EOG to commit capital there.

'True wildcatting' in Venezuela and Aruba

Bill Armstrong, a Texan oilman known as one of the country's most successful wildcatters, is taking a very different bet. Armstrong, who helped revive exploration on Alaska's North Slope, has struck a draft deal with Venezuelan authorities and already purchased seismic data to get ahead of rival bidders, a move made possible by Donald Trump's removal of longtime Venezuelan leader Nicolas Maduro in January. Armstrong is also eyeing waters off Aruba, just beside Venezuela's coast, calling it true wildcatting since only one other well has ever been drilled there. Describing the seismic imagery from his earlier Alaska work, Armstrong put it simply: it's like geo porn.

A skills gap two decades in the making

The pivot is not limited to two companies. Majors and independents including ExxonMobil, Chevron, ConocoPhillips, Occidental Petroleum, APA Corp, Murphy Oil and Continental Resources are all weighing renewed international exploration as the roughly 20 year old domestic shale boom matures and the thrill of easy discovery at home fades. Bobby Tudor, founder and chief executive of Artemis Energy Partners, an investment firm that helped fund the original shale boom, predicts a broader expansion across the Western Hemisphere. He is candid about the risk that comes with it, warning that the industry's exploration muscle memory got hollowed out pretty badly during two decades spent drilling proven shale plays instead of genuine frontier wells. Much of today's workforce has never drilled a dry hole, a gap that becomes a real risk management problem the moment companies go back to chasing prospects with no guaranteed payoff.

A generation of engineers grew up believing the rock underneath them was already mapped. The next stretch of this business runs on the ones willing to bet it isn't.

The map keeps widening. Beyond Venezuela and the Gulf states, companies are also weighing exploration in Kazakhstan, Guyana, Argentina, parts of Africa and Australia, alongside continued frontier work in Alaska itself. Whether the returns justify the risk will depend on wells that, unlike the shale plays of the last twenty years, nobody can yet promise will produce anything at all.