Lower 48 H2 2018 Supply: resiliency in near-term

Lower 48 H2 2018 Supply: resiliency in near-term We recently released our H2 2018 Lower 48 crude and natural gas supply views and some of the highlights include: - US Lower 48 oil production peaks in 2025 at 12 mmbbl/d. During the same year, 3.5 bcfd more of associated gas is produced compared to the last update. - Permian oil growth is accelerated in short-term but does not last as tier one inventory is exhausted. - Northeast natural gas volumes get pushed out in the forecast as operators here see more pressure to be capital-disciplined than counterparts in plays like the Haynesville. Even with lower oil prices, due to the current inventory of low-cost locations, production levels can comfortably be maintained in near-term. We do not see production rolling over until at least 2023 with an annual average WTI oil price of $60/bbl. Potential for sustained cost deflation in this environment would cushion this projection even more.