Skip to comments.Growth in U.S. hydrocarbon production from shale resources driven by drilling efficiency
Posted on 03/11/2014 5:21:27 AM PDT by thackney
The productivity of oil and natural gas wells is steadily increasing in many basins across the United States because of the increasing precision and efficiency of horizontal drilling and hydraulic fracturing in oil and natural gas extraction. Many resource-producing basins are experiencing an increasing yield over time in either oil (Bakken, Eagle Ford, Niobrara) or natural gas (Marcellus, Haynesville). The geology of each oil and natural gas resource play is diverse, and individual rig or well performance can vary dramatically. However, drilling activity in U.S. shale plays is now generally producing greater quantities of oil and/or natural gas than in the past.
As noted in March's productivity report, five of the six U.S. shale plays tracked by the DPR have seen increases in oil and natural gas production per rig over the past few years. According to EIA's March DPR, the Eagle Ford Shale is leading in increased production of oil per rig, and the Marcellus Shale is leading in increased production of natural gas per rig.
DPR data show that each drilling rig in the Eagle Ford Shale will contribute over 400 barrels of oil per day (bbl/d) more in April 2014 than it would have in the same formation in January 2007. At the same time, the DPR also shows that a Marcellus Shale well completed by a rig in April 2014 can be expected to yield over 6 million cubic feet of natural gas per day (Mcf/d) more than a well completed by that rig in that formation in 2007.
This trend of increasing rig productivity is one factor helping to increase the nation's oil and natural gas production. The latest Annual Energy Outlook forecasts that U.S. oil production will reach 9.6 million barrels per day in 2019, and natural gas production will increase by 56% through 2040.
Things have changed a lot since I worked my first horizontal well back in 1990. (Top drives, pipe wranglers, iron roughnecks, walking rigs, mud motors and bit technology, better MWD tools, and that's just some of it on the drilling end).
As apotential investment what companies would you buy that make the equipment that goes into the drilling. I know that the companies that make taker cars have been doing well financially too.
As potential investment what companies would you buy that make the equipment that goes into the drilling. I know that the companies that make taker cars have been doing well financially too.
The latest Annual Energy Outlook forecasts that U.S. oil production will reach 9.6 million barrels per day in 2019,
Didn’t the EIA say that 9.6 million barrels per day would be reached by the end of 2015?
Latest I’ve seen:
Forecast production increases from an estimated 7.4 million bbl/d in 2013 to 8.4 million bbl/d in 2014 and 9.2 million bbl/d in 2015. The U.S. crude oil production forecast for both 2014 and 2015 was revised downward by 0.1 million bbl/d from last month’s STEO because of indications that severe weather this winter has caused temporary slowdowns in completing new wells
That was the annual report from late last year.
U.S. production of crude oil (including lease condensate) in the AEO2014 Reference case increases from 6.5 MMbbl/d in 2012 to 9.6 MMbbl/d in 2019, 22% higher than in AEO2013 (Figure 11). Despite a decline after 2019, U.S. crude oil production remains at or above about 7.5 MMbbl/d through 2040.
You also have to be careful what is included in the number, lease condensate, other NGLs, etc. Some are actual total liquid and include ethanol.
While they may be one of the best for data, they are still a government entity and projections are not perfection.
I'd look for companies which increase efficiency, address potential environmental issues, or manufacture the things the oil companies need on an ongoing basis.
Keep in mind that everyone looks good when prices are high, so ask how much of a hit to the price of oil could these companies take and still remain profitable, because downward pressure on oil prices will result in downward pressure on vendor prices as well.