Current oil price: $95.41 WTI| Latest US rig count: 520

Oil at $100 could trigger an additional 2.2 million bpd of US tight oil output by 2023

Up to 2.2 million barrels per day (bpd) of US tight oil could be unleashed in the event of a supercycle – with oil prices remaining around or above $100 per barrel – driven by growing demand and continued supply tightness, our research predicts. Tight oil output in the core producing regions of the US in the fourth quarter of 2021 was around 7.7 million bpd, continuing an upward trend but short of the pre-pandemic levels. Production in these regions is expected to surpass the 2019 high of 8.1 million bpd by the second quarter of this year and expand further if a supercycle materializes.  

The full article provides an overview of the production forecasts quarter by quarter, as well goes into detail examining the different scenarios based on varying price range per barrel.

US NGL output surges to a record high on strong GoM supply and increased ethane recovery

Natural gas liquids (NGL) output from processing plants in the US hit a new record high in November 2021, reaching 5.84 million barrels per day (bpd) as a result of a recovery in Gulf of Mexico supplies post-Hurricane Ida and improved ethane recovery, our research indicates. The surge has helped push total US hydrocarbon liquids output to more than 17.3 million bpd, almost back to pre-Covid-19 levels.

The United States’ new record high NGL production in November was about 60,000 bpd higher than the month before and 240,000 bpd more than in September 2021. Texas and New Mexico combined NGL output hit a new all-time high of 3.3 million bpd in November, growing about 10% through the second half of 2021. The rest of the country accounted for the remaining 2.5 million bpd of NGL in November.

In the full article, our Head of Shale research, Artem Abramov, breaks down production levels across key regions in the US to provide a view of what 2022 will hold.

Permian new well productivity set to breach 1,000 boepd in 2022 on record lateral footage

The average productivity of new wells in the Permian Basin is set to hit a record high in 2022, breaching past 1,000 barrels of oil equivalent per day (boepd) due to a surge in lateral well length, our research indicates.

New wells are expected to break the 1,000 boepd threshold in 2022 for the first time on record, rising from the 974 boepd achieved in 2021. Average daily production levels have steadily climbed since 2010, closely aligned with the horizontal well length, which is expected to reach 9,500 feet in 2022.

“The Permian is now entering a three-mile lateral era. Such long wells were viewed as inferior for their high finding and development costs in some deeper zones just a few years ago, but modern equipment and completion methods allow extended reach wells to spread across the entire basin,” says Artem Abramov, Head of Shale Research.

The full article provides deeper insights into average historical well length over the recent years and recent perforation trends by some key operators in the Permian. 

Five trends shaping US shale gas supply in 2022

For most US shale gas producers, 2021 was a truly fantastic year. The industry saw a sharp uptick in merger and acquisition (M&A) activity, with big expansions of leading Appalachian producers into the Haynesville region drawing the most attention. 

At the same time, a combination of disciplined investment programs, structural capital efficiency improvements, robust supply and inflated strip prices together allowed Appalachian and Haynesville producers to generate $18 billion of upstream free cash flow. That has dwarfed all previous years when free cash flow was either negative or near zero as gas markets remained depressed through a good part of the last decade amid ample supplies, with limited pipeline and export capacity capping consumption.

The full document takes a look at the US shale gas industry's prospects in 2022 and beyond, highlighting five key trends that are shaping the country's supply potential today. 

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