Upside gauged: additional tight oil growth for a stretched market Report

Insight 21 March 2022

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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.

Executive summary
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 4 images and tables including:

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