US shale players cut budgets and boost production

March 1, 2019

On average, US shale companies expect to deliver 15% growth in oil production in 2019 over 2018. At the same time, operators say they will cut capital spending by 5% this year.

Rystad Energy has analyzed the recently released earnings reports for the fourth quarter of 2018 from 45 US operators, which also included their guidance for production and capital expenditure in the year ahead.

“Earnings and guidance confirm that most US shale operators aim to moderate drilling and completion activity this year, prioritizing cost discipline over aggressive growth,” said Rystad Energy partner Artem Abramov. 

A chart showing 2019 capital budget guidance vs 2018 actual spend by company type. Source: Rystad Energy research and analysis


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The numbers look different if planned 2019 oil production is compared to the reported oil rate in the fourth quarter of 2018. On average, exit-2018 production rates for US onshore focused companies was significantly higher than average for the whole year.

“On average ‘only’ 5% growth in oil volumes is expected throughout 2019, as just a handful of shale operators anticipate double-digit oil production additions versus the last quarter of 2018. In fact, a number of shale players estimate a decrease in oil output versus 4Q 2018,” Abramov added.

Still, 5% growth for full year 2019 versus the fourth quarter of 2018 means 10% growth between the fourth quarter of 2018 and the fourth quarter of 2019.

“If this growth rate is representative for the entire 9.5 million barrels per day oil output currently achieved in the lower 48 states excluding Gulf of Mexico, we are then talking about nearly 1 million barrels per day of oil production growth from the US,” Abramov remarked. 

A bar chart showing the guided oil production change for full-year 2019 vs full-year 2018

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Contacts 

Artem Abramov
Head of Shale Research
Phone: +47 22 42 98 91
artem.abramov@rystadenergy.com

 

Morten Bertelsen
Media Relations
Phone: +47 951 98 742
morten.bertelsen@rystadenergy.com

 

About Rystad Energy
Rystad Energy is an independent energy research and business intelligence company providing data, tools, analytics and consultancy services to the global energy industry. Our products and services cover energy fundamentals and the global and regional upstream, oilfield services and renewable energy industries, tailored to analysts, managers and executives alike. Rystad Energy’s headquarters are located in Oslo, Norway with offices in London, New York, Houston, Stavanger, Moscow, Rio de Janeiro, Singapore, Bangalore, Tokyo, Sydney and Dubai.