After years of decline and a wave of industry departures, the Fayetteville Shale may be primed for a comeback, if not in rigs and rapid growth, then in long-term value, steady investment, and operational excellence.

That was the message from David Howald, chief operating officer of Flywheel Energy, during the Shale Survivor panel at FAB&T Outlook Conway on May 25. Moderated by Mark Wilson, president and COO of FAB&T, the panel explored how Flywheel became the last remaining operator in the Fayetteville Shale and why the company remains committed to the region.

“The Fayetteville has very thin economics, but we believe in its long-term value,” Howald said. “This isn’t a boom-or-bust play for us. It’s about sustainable, smart operations.”

From Boom to Balance

Howald provided a candid history of the region’s shale play, noting how early excitement in the 2000s led to a drilling frenzy that was visible everywhere, from packed restaurants to crowded job sites. But as larger operators like Southwestern Energy began prioritizing more lucrative shale plays elsewhere, the Fayetteville’s profile dropped.

“What people saw as the ‘bust’ was really a shift in priorities,” Howald said. “Public companies were looking to maximize stock value, which meant chasing bigger reserves in other basins.”

Flywheel saw opportunity in what others considered played out. Backed initially by private equity, the company acquired late-life assets that still generated cash flow and could be improved through operational upgrades.

Making the Math Work

Rather than wait for natural gas prices to climb high enough to justify new drilling, Flywheel focused on efficiency. Its strategy: optimize every part of the operation to make the Fayetteville’s economics viable again.

“The average field decline is 15 to 20 percent each year,” Howald said. “You either let the wells fade out or you improve how they run, and that’s where we’ve put our energy.”

One example: changes to the midstream system, including water removal and pressure adjustments, boosted overall production by 5 to 7 percent. That single improvement surpassed industry benchmarks and highlighted the value of empowering frontline teams, something Howald credits to the company’s military-influenced leadership.

“Our C-suite has more than five years of combined combat experience,” he said. “We were trained to support the people closest to the action, and that’s how we run Flywheel — leaders remove barriers, and teams solve problems.”

A New Kind of Investor

In 2024, Flywheel secured a new financial backer, a New York-based asset management firm known for forever capital. These investors aren’t chasing quick flips; they want decades of consistent returns. That makes Flywheel’s approach a good fit.

To meet expectations, Flywheel plans to drill five new wells in 2025 using updated completion technologies. While the Fayetteville will never compete with massive shale plays like the Permian or Haynesville in sheer volume, Howald believes it can exceed expectations through precision.

“We’re not trying to drill a Permian well,” he said. “We’re trying to show that with the right technology and the right operations, we can deliver repeatable, economic returns.”

Arkansas: The Right Fit

Howald praised Arkansas for its balance of oversight and practicality, calling it the “Goldilocks zone” for oil and gas operations. Unlike heavily regulated states like California or over-saturated regions like Texas, Howald said, Arkansas offers operators the chance to collaborate with regulators and scale sensibly.

“In other states, it’s either extreme regulation or extreme competition,” he said. “Here, you can actually have conversations about what works and what makes sense for both the community and the environment.”

He noted that Flywheel’s operational presence contributed between $140 million and $150 million to the state last year, through a combination of royalties, taxes, and wages.

“We’re not bringing in 30 rigs,” he said. “But we’re bringing sustained economic value and building a foundation that can last decades.”

Looking Ahead

Flywheel’s future in Arkansas will hinge on the performance of this year’s five new wells and the ongoing support of its long-term investors. But if the results meet or exceed expectations, the company could restart routine drilling and extend the Fayetteville’s productive life by another 20 years.

“This isn’t a short-term play for us,” Howald said. “This is our foundation asset, and we’re committed to making it work.”

With its unique mix of operational discipline, long-term capital, and a regulatory environment that encourages collaboration, Flywheel Energy is betting big on the staying power of Arkansas shale.

“We’re not a boom-and-bust story,” Howald said. “We’re a survivor and we plan to stay.”

FAB&T Outlook Conway was presented by Landmark CPAs and Smith Ford. The panel was sponsored by Rogers Group.