Enteq Technologies (LON: NTQ) shares are up 18% on Wednesday. NTQ shares are also up 30% and more over the past few days. The reasoning here is simply that their new tech for oil, gas, even hydrogen, drilling appears to work. It’s not a wild and exciting advance, it’s just one of those marginal improvements. Well, OK, it is a significant advance assuming it really does work as advertised. But it is still simply a development of tech, it’s not like they’ve suddenly leapt to using sharks with mounted lasers or anything. As such it’s got a good chance of being adopted more widely of course - it’s always much more difficult to gain adoption of something truly new in a mature industry than it is to proffer something that’s an advance on known and understood tech.
The announcement is: “Enteq Technologies plc (AIM: NTQ.L), the energy services technology and equipment supplier is pleased to provide an update following downhole drilling testing in North America for this game-changing alternative to traditional Rotary Steerable Systems (RSS), the SABER Tool ("SABER"). The SABER system met test objectives during extensive drilling, successfully generating steering forces to change the direction of the well at angles typically expected by the industry for many applications. Delivery of this performance confirms in the Directors' belief the technical ability of the SABER system to provide a competitive commercial solution. An independent survey was taken to validate the changes in trajectory.” OK, that bodes well for the company and so the shares are up that 18%.
Enteq Technologies share price from Google Finance
It’s possible to take a larger lesson from this though. This is the reason we never actually do run out of oil and or gas. Because the technologies we have available to us to exploit them keep improving. This here, from Enteq, allows drilling around corners more easily - and yes, this is something done to get into a seam or reservoir. But think on this a little bit more. The reason people are willing to pay for this improvement in performance is that it enables the exploitation of more reservoirs. Well, OK, that’s obvious - but then run that back the other way. The existence of this tech means there are more reservoirs that can be exploited.
To put the same thing with another example. BP’s Macondo well was a disaster, as we all know. But it was successful at drilling to 5,000 feet. Which means that we’ve now the whole world to explore again for deposits, reservoirs, at 5,000 feet. Each advance in drilling tech does not just mean better extraction from known deposits. It gives us the whole world to explore again for deposits which can now be reached with the new tech.
Enteq might do very well out of this new tech. But the big lesson is what the continued development of new tech means for all of us.
