George Mitchell's advice to oil and gas explorationists? "Be bold."

The founder of America's--and now the world's--unconventional oil and gas plays says the late, legendary explorer Michel Halbouty would rib him decades ago, telling him, "Come on. Explore. Do something."

Upon discovering how to extract natural gas resources from the Barnett shale after a first well, C.W. Slay No. 1 in Newark East Field, 30 years ago, and hundreds more thereafter, he told Halbouty, "Mike, I found this field because of you."

He quips in this exclusive interview with Hart Energy for a video tribute that celebrates the 30th anniversary of C.W. Slay, the Barnett play opener, "I've been busy now for 60 years, drilling wells all over the country, and now I've done something important."

(Editor’s Note:The 30th anniversary of America’s shale plays will be celebrated at Hart Energy's sixth annual Developing Unconventional Gas (DUG) conference April 18-20 in Fort Worth with more than 2,000 attendees and a keynote address by President George W. Bush. For conference details and to register, click DUGConference.com.)

The application Mitchell pioneered of horizontal drilling and multi-stage fracturing into the low-permeability, low-porosity shale has re-invented the U.S. natural gas profile. The U.S. led in 2009 for a third consecutive year in percentage increase in gas production, posting 3.5% more than in 2008, according to the annual BP Statistical Review of World Energy published in June 2010.

It has surpassed Russia as the world's most prolific gas producer.

And, the application of the technology into U.S. oil plays now contributed to the U.S. also posting the largest increase in oil production in 2009. "(Daily) U.S. production increased by 460,000 barrels, or 7%--the largest increase in the world last year and the largest U.S. percentage increase in our data set," the BP Plc analysts report. That data set is of 59 years of world production history.

Mitchell says America could readily use the additional oil that is being produced from horizontal and multi-frac plays. "We have to get more oily and you'll see a lot of the industry trying to make more oil out of plays…If we have the same information on oil plays right now that we have on the gas plays, we would solve a lot of our oil problems…There's a lot of work that's still to be done."

According to data from Whiting Petroleum Corp., a leading operator in the Bakken oil play in North Dakota, production there has gone from virtually zero several years ago to some 400,000 barrels per day. Pipeline operators are gearing up to increase take-away capacity from the Williston Basin to nearly 1 million barrels a day by year-end 2013, according to Jim Volker, Whiting chairman and chief executive.

Mitchell says the Bakken is a play he missed, and chuckles. "The Bakken's been an old play. I remember looking at it. I drilled a well there back in '83, a wildcat well. We had the (oil) show, but we never could make a well out of it. I couldn't figure out how I missed it, but I did.

"It's a big play now and it's oil, so that's good for the country."

Some more highlights:

--On the Marcellus shale, Mitchell accumulated 50,000 acres over the Btu-rich gas play in Appalachia, and sold it "for a nice profit." After drilling just the first of several wells, "I began to think half the state (of Pennsylvania) would make gas and, after it's all developed, we'll find out. It’s interesting this is such a large play (involving Pennsylvania and neighboring states)…The Marcellus is a tremendous play."

--On exporting now-abundant U.S. gas, he hopes it isn't. "I don't think they should (export it) right now. I think they should work on how to use more gas (here), like they're doing now and that Boone Pickens is talking about."

Pickens has been lobbying the U.S. government to incent use of natural gas as a transportation fuel, beginning with heavy-duty trucks. One Mcf (thousand cubic feet) of gas is the energy equivalent of five gallons of diesel, Pickens tells OilandGasInvestor.com in the exclusive article "Boone Pickens OK With Exporting U.S. Gas, But Would Be Disappointed" (March 31, 2011).

Mitchell says, "If you have trucks getting three miles to the gallon, get fuel for them. Let's figure out how to do that. I think there are a lot of gas uses that this nation needs and that can be devised from the excess gas that's coming out of the shales…The gas production can help take care of some of our oil needs.

"Oil production is still deficient, but we have excess gas."

--He urges producers to take care of water use when drilling, though. While one of the most recognized American oil and gas explorationists, Mitchell is also active in environmental and ecological endeavors, such as creating The Woodlands, Texas, community north of Houston.

"You have to clean up the water (used in drilling). It is extremely important that the industry is not criticized for not cleaning up the water. Devon (Energy Corp.) is doing a good job. The industry needs to work with the government and help them understand. I think we can do much better."

--Where would Mitchell look for oil today? "I'd still say the shales right now, and I'm looking at that too."

--And, about how major oil companies, both American and foreign, are knocking on relatively small U.S. independents' doors, wanting to know how to work the shales, he says, "It's amazing, what the independents have done. Twenty years ago, everyone thought they'd be out of business."

Contact the author, Nissa Darbonne, at ndarbonne@hartenergy.com.

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