The problem has been adapting both models to tight formation oil and gas. A once quiet debate is nearing critical mass with repercussions in the oil and gas space. Indeed, the event horizon of sub-$60 oil suggests the critical mass threshold may be at hand. The debate stems from the vexatious issue of parent/child well interaction and the related phenomenon of interference on nearby wells from frac hits during well stimulation. The phenomenon implies restrictions on recoverable reserves and threatens the financial model associated with reserve-based lending as a mechanism for financing capital-intensive oil and gas development.
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