For years, Harold Korell has been a fan of business management guru and author Peter Drucker. Korell, the CEO of Southwestern Energy Corp. (NYSE: SWN) says Drucker talks of innovation and looking for incongruities or unexpected occurrences that lead to new ideas.

Korell says the company’s discovery of the Fayetteville shale was just such an incongruity. It drilled gas wells to what it thought were traditional zones in northern Arkansas, but it encountered the Wedington Incongruity and the wells produced four to six times more gas than was expected. That led to more geological investigation—and the rest is history. Since then, Southwestern Energy has drilled more than 500 shale wells and is producing about 350 million cubic feet per day. Last year it drilled 116 wells with lateral legs longer than 3,000 feet.

Process improvements are the goal this year. “We know we need to drill longer laterals; we know we need to pump at a higher rate on our fracs. We know high-density well clusters work well.”

Southwestern’s budget this year calls for 475 horizontal shale wells and spending of about $1 billion.

“The Fayetteville is the coal car right behind the engine [Barnett] when you talk about shale plays,” Korell said at the 3rd annual Developing Unconventional Gas (DUG), hosted by Oil and Gas Investor in Fort Worth recently.

“Are we at the end of the road on shale projects? I don’t think so. In Washington, they think this industry is over…but we have lots of wells to drill. We are still leasing in the Marcellus shale and we are drilling our first well there now, so we’re excited.”

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