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Making the case for Asian investment in US tight oil

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Report summary

Can Asian upstream players afford not to invest in US tight oil? Almost totally absent from the Permania that has dominated M&A markets over the last 12 months we believe this is about to change. With portfolios currently heavily weighted towards mature conventional assets across Asia Pacific most top Asian players are facing long term production declines. But given their relative financial strength investing in tight oil that offers large volumes and low breakevens appears to be a compelling solution. At the same time financially stretched Lower 48 operators with ambitious growth plans may welcome capital investments from partners that share a long term vision. We focus on the Permian basin as a case study identifying operators with near term negative cash flows and large undrilled well inventory. These represent viable opportunities for Asian (and other) investors in tight oil's hottest basin.

What's included

This report contains

  • Document

    Making the case for Asian investment in US tight oil.pdf

    PDF 1.45 MB

Table of contents

Tables and charts

This report includes 14 images and tables including:

Images

  • Oil and gas production - Asia vs United States
  • Top 20 Asian companies remaining reserves (2017) & Company peer groups production indexed to 2017
  • Upstream portfolio (NPV) - peer groups
  • Financial stregnth - Asian vs Focused US firms & 2017/19 breakevens - Asian vs Focused US firms
  • Pre-FID and US L48 future drilling production by breakeven in 2026 – by resource theme
  • Pre-FID Asian vs tight oil projects - breakevens
  • Total L48 M&A spend (2007-2016) & Asian companies (by domicile) - L48 M&A spend
  • Asian companies’ US L48 M&A spend (2007-2016) by seller types
  • Key reasons why might Asian capital return to the US upstream: Asian monetary/government policies, Flexible investors and structures, US tight oil could benefit from capital, Hedging strategies
  • Aggregate US L48 play cash flow
  • Permian companies with projected negative asset cash flow (2017) and large undrilled well inventories
  • Well performance across selected Permian Wolfcamp operators
  • Permian - Development well breakeven vs. undrilled portfolio value
  • Hurdles - issues and risks

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