Insight
Upside gauged: additional tight oil growth for a stretched market
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Should the Lower 48 be producing more crude? Tight oil was the de facto swing producer in the 2010s and the world is desperately looking for lower-risk barrels today. Onshore US stepped up in prior tight markets, but 2022 is different. Are geopolitical events changing the calculus though? Click through to read what would have to happen for US production to meaningfully accelerate. There are five important hurdles to clear, ranging from regulatory frameworks to crude export capacity to cash flow yields for investors. Solutions to all the growth challenges would need to align though, almost like stars. We’ve modeled that scenario. But recall a history of aggressive spending has burned investors in past cycles, creating headwinds to the scenario becoming a reality.
Table of contents
- Executive summary
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What would need to change?
- 1. Convince stakeholders a bigger business is a better model
- 2. Rebuild the OFS supply chain
- 3. Construct better bridges with Washington DC
- 4. Quickly bring back E&A
- 5. Increase US exports
- If these factors align, an updated growth scenario could occur
Tables and charts
This report includes the following images and tables:
- Short-term Lower 48 oil supply potential: US$100/bbl WTI and bottlenecks removed
- Short term Lower 48 oil quarterly growth potential: US$100/bbl WTI and bottlenecks removed
- 2022-2026 average cash flow profile assuming 5% growth per annum
- Ability to support additional Lower 48 oil supply growth: traffic light index
What's included
This report contains:
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