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


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

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. 

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  • Impact of oil price on upstream investment, costs and production in the US Lower 48 PDF - 879.49 KB 10 Pages, 0 Tables, 18 Figures

Description

This Upstream Oil and Gas Insight report highlights the key issues surrounding this topic, and draws out the key implications for those involved.

This report helps participants, suppliers and advisors understand trends, risks and issues within the upstream oil and gas industry. It gives you an expert point of view to support informed decision making.

Wood Mackenzie's 500 dedicated analysts are located in the markets they cover. They produce forward-looking analysis at both country and asset level across the globe, backed by our robust proprietary database of trusted research.

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  • 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

In this report there are 18 tables or charts, including:

  • Investment falls most rapidly in the US Lower 48
    • Lower 48 capex cuts by region
  • Two tight oil plays hit hardest
    • 2016-2017 Lower 48 capex allocations
    • Decline in investment across Lower 48 key plays
    • Bakken capex spend by operator
    • Bakken development by operator
    • Capex changes across Eagle Ford sub-plays
    • Capex declines across tight oil plays
  • Falling costs drive further capex reductions
    • Cost deflation and efficiency gains
  • Plummeting rig count and drilling declines underpin the fall in capex
    • US Lower 48 DUC backlog and horizontal rig count
  • Well productivity improvements bolster falling production
    • EUR improvements across key liquids plays
    • EUR improvements across key gas plays
  • Production losses to average 4.2 million boe/d through 2020
    • Oil production forecast by region
    • Gas production forecast by region
    • Lower 48 production from key tight oil plays
    • Change in tight oil supply from the key plays
    • Narrowing crude oil price differentials
    • Value comparison from Q4 2014 to Q2 2016
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