The benefit of refracking is the cost. Drilling a new well costs roughly $8 million whereas refracking an old well only costs about $2 million. That level of cost savings is far in excess of what can be saved by even the most aggressive of negotiations with suppliers when drilling a new well.
Baker Hughes, Haliburton, and Schlumberger are all offering services to help oil companies pick the right wells for refracking.
Indeed these oil field services companies are so confident in the value of refracking that Schlumberger, for instance, is offering to foot the entire bill for refracking upfront, and then get paid back later as the well produces.
With this kind of guarantee, it is hard to see a downside in the business.
