Rystad Energy offers a wide product range of North American shale products (NASAnalysis).
NASReport: Up-to-date play coverage incorporating prospectivity maps, company-specific data, acreage and reserves, production forecasts of plays up to 2025 as well as infrastructure and economics of plays.
NASCube: Database that provides US and Canada shale gas and tight oil plays data for more than 370 companies and 89 plays. Data derives from Rystad Energy’s global and complete upstream database UCube, with additional information regarding acreage and well data.
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.
NASWellData: Listing of official well data for key plays in addition to estimates for average well curves for selected acreages.
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In light of the oil price drop in 2015, shale production proved to be resilient in two ways. First, operators were able to benefit from lower unit costs and higher efficiency. Second, each well’s performance increased because of high grading and better completion techniques.
Using the Eagle Ford Shale play as an example, Figure 1 shows the evolution of the average wellhead breakeven prices* from 2012 to 2015. The values are derived by studying every single well in terms of well performance, hydrocarbon content and drilling and completion cost. Back in 2012 and 2013, the average breakeven was ~$70/bbl. In 2014, the wellhead breakeven price dropped by ~10% reaching ~ $63/bbl. For 2015, the reduction is estimated to be around 25%.
To better understand the 2015 development of the wellhead breakeven prices, Figure 2 shows the breakdown of the price split between the two drivers, well performance and unit prices. The contribution from unit cost savings is calculated based on 2014 well parameters with 2015 cost levels. The well performance contribution is simply the difference between the breakeven price adjusted for unit cost savings and 2015’s breakeven prices.
North American shale plays are heterogeneous in nature, with the best areas dependent on the optimal combination of depth, thickness and thermal maturity. Therefore, the average breakeven price does not provide a good overview of the profitability of a play. In 2015, operators are focusing the development on the very core areas where breakeven prices are significantly below average. To illustrate the breakeven spreads, Figure 3 shows the wellhead breakeven oil prices for the wells put on production in 2014 and 2015 where the breakeven oil prices are calculated using the 2015 unit costs. According to the map, the best wells have breakeven prices lower than $40/bbl. The core counties include Karnes, DeWitt and part of Gonzales counties, where the main companies are ConocoPhillips, Marathon Oil, BHP Billiton and EOG Resources. ConocoPhillips is currently running three rigs in DeWitt County, where BHP Billiton has seven rigs. Marathon Oil also operates seven rigs in Karnes County. Wells located in Dimmitt and Webb counties are also considered core, where the main operators are Anadarko and Chesapeake.
As breakeven prices fall further in 2015, it is important to highlight that the core areas are still profitable at prices below $40/bbl. It is clear that in the Eagle Ford Shale play the high grading and unit cost savings are having a positive impact on the wellhead breakeven oil prices. The wellhead breakeven oil price has fallen around 25% in 2015 compared to 2014. This also explains why shale focused companies are more resilient towards the low oil price environment.
* Required oil price to achieve a type-well NPV of 0. It is assumed that condensate price is the same as oil price, NGL price is constant at $36/boe and gas price is constant at $3/kcf.