“There was euphoria in the early ’80s that the price of oil was going to go up forever, that if you weren’t a millionaire, you soon would be. Irrational euphoria gripped the entire southwest,” he said. “There’s none of that euphoria now. Everyone in the industry has a much more mature understanding that prices go up and down. They will never go up forever, and they will never go down forever. With that knowledge, there’s not that opportunity for irrational behavior.”
While Oklahoma City continues to grow, the energy industry likely will experience improvements, as well, Nichols said.
“The history of this industry is one of technology continuing to open up new opportunities,” he said. “I can give numerous examples of any one geographic area being totally exhausted and totally produced just to have new technology open it back up.”
Nichols pointed to the growing Mississippi Lime play of northern Oklahoma, where Devon and other producers are using horizontal drilling and hydraulic fracturing to produce large amounts of oil and natural gas from some of the state’s oldest oil fields.
“You would think by now Texas and Oklahoma would be totally depleted, nothing left,” he said. “But that’s wrong. Technology has opened up new horizons. There’s no reason to think the current technology is the last technology, that there will be no new technology out there going forward.”