Article: Examining the Commerciality of Recompletion
Per Magnus Nysveen, Head of Analysis, and Leslie Wei, Senior Analyst
RYSTAD ENERGY PRODUCT HIGHLIGHTS
Rystad Energy offers a wide product range of North American shale products (NASAnalysis).
NASCube: Database that provides US and Canada shale gas and tight oil plays data for 380+ companies and 138 shale plays and sub-plays. Data derives from Rystad Energy’s global and complete upstream database UCube, with additional information regarding acreage and well data.
NASWellCube:Collection of official US & CA well data, covering over 200,000 horizontal and fracked vertical wells, with complete US shale coverage, and including well attributes, monthly production rates at well level, reported and calculated initial production rates, well configuration parameters as well as short-term activity and production forecasts. In January 2016, Rystad Energy released the NASWellCube Premium module. The premium version in addition includes short-term activity and production forecasts, well cost and breakeven price analysis, estimated 3-stream production series and estimated drilling days for each well.
NASReport: Consists of a monthly insight, short term and medium term forecasts for both production and spending for key North American Shale plays and operators, a deep-dive into well data and completion trends. The NASReport is now electronically delivered on a monthly basis.
NASMaps: Geological, company acreage and well location maps. Maps are available as pdf-layers and GIS files with embedded information for import to GIS software.
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After the challenges faced in 2015, North American Shale operators are carefully deciding their 2016 capex guidings, suggesting further cuts going forward. What can we expect in terms of short-term shale outlook? In 2016, for the first time ever, North American shale gas and tight oil supply will remain flat YoY. Total North American shale investments decreased by over 42% in 2015, YoY; in 2016, the investments are anticipated to fall by another 35%. Never before has it been as crucial to understand the drivers behind the turbulent NA shale market. This month’s shale newsletter examines the short-term production and spending forecast for NA shale and provides insight into the top performers in the Permian Basin.
January 2016 NASReport insight - Benchmarking well performances in the Permian Basin reveals top performers Well established shale operators such as EOG, Encana and Anadarko, each of which has mastered the operations of the Eagle Ford, Montney and Niobrara shale plays, respectively, bring new renaissance to the Permian basin. These companies are among those with most spudded wells in this Basin during 2015 and display among the lowest well cost per EUR with also the most feet drilled per day, for wells targeting the Wolfcamp and Bone Spring formations. Legacy operating companies in the Permian Basin e.g. Oxy, Concho and Apache fall behind when benchmarking well performances of the most recent horizontal wells.
Short-term production forecast Rystad Energy estimates total supply from shale gas and tight oil formations to reach ~22 million boe/d in 2020, of which about 8 million bbl/d is expected to be from light oil, 3 million bbl/d from plant NGLs and nearly 68 bcf/d from sales gas. Production of oil from shale and tight formations from North America will transform the global energy landscape in many ways. Rystad Energy forecasts North America to reach self-sufficiency for liquids by around 2019. This will have large geopolitical impacts as OPEC countries will have to gradually divert their exports from the US towards Asia. However, heavy crude oil may still be imported as Gulf Coast refineries provide a large portion of the world’s capacity to refined heavy crudes.
Short-term spending forecast Total investments in the NA tight oil and shale gas plays peaked at ~$170 billion in 2014. Due to the oil price crash, investments dropped to just below $100 billion in 2015. We forecast that in 2016, investments will drop an additional 35% and will amount to ~$60 billion. The largest plays in terms of investments in 2016 are expected to be the “Big Four”: Eagle Ford ($11 billion), Permian Midland ($7 billion), Bakken ($7 billion) and Permian Delaware ($7 billion); followed by Marcellus ($6 billion), Niobrara ($4 billion) and Montney in Canada ($4 billion). Rystad Energy expects the total NA shale investment to have an upward trend from 2017, growing on average by ~30% towards 2020. 2014 investments levels are not expected to be reached again before 2020.