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US Lower 48: 4 things to look for in 2022

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03 December 2021

US Lower 48: 4 things to look for in 2022

Report summary

In 2021, Lower 48 companies recalibrated to a changing market landscape. Reduced reinvestment, emerging cost inflation across Lower 48 oil field services (OFS), and a greater focus on ESG were top themes of the year. Here are the topics we expect will be front of mind in 2022: As promised, US E&Ps have increased free cash flow, paid back shareholders, and reduced debt. Oil-focused operator reinvestment rates dipped to 38% in Q3 2021. Companies have realized the benefits of a conservative capex strategy, and they will be cautious about increasing reinvestment rates in 2022. Demand for goods and services has recovered, but global supply chains can’t keep up. Lower 48 oilfield services (OFS) are no exception, and labor shortages will be the primary operations challenge. New Mexico Permian production has rebounded faster than anticipated. If operators continue to high-grade their opportunities, production will surpass pre-pandemic levels even with reinvestment rates at historic lows.

Table of contents

  • Executive summary
  • 1. Reinvestment rates fall to a trough
  • 2. Supply chain bottlenecks and labor constraints increase costs
  • 3. New Mexico Permian production reaches new highs
  • What to look for in 2022 – a regional upstream series

Tables and charts

This report includes 2 images and tables including:

  • Indexed commodity price growth
  • New Mexico and Texas Wolfcamp production since 2019

What's included

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    US Lower 48: 4 things to look for in 2022

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