Impact of oil price on upstream investment, costs and production in the US Lower 48 Report

Insight 02 June 2016

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Report summary

In the two years since oil prices collapsed, upstream development spend worldwide has been cut at an unprecedented rate, with more than US$370 billion of capital expenditure cut across 2016 and 2017. While massive in aggregate, no country's response rivals the swiftness and scale of the US Lower 48, which slashed nearly US$150 billion from 2016-17 spend and over US$250 billion across the next five years.

Investment falls most rapidly in the US Lower 48
Two tight oil plays hit hardest
- Spotlight on the Bakken
- Eagle Ford: a case study in high-grading
Falling costs drive further capex reductions
Plummeting rig count and drilling declines underpin the fall in capex
Well productivity improvements bolster falling production
Production losses to average 4.2 million boe/d through 2020