Africa’s government may award its first shale gas exploration licenses by the end of September, after environmental objections delayed the process.
Exxon Mobil, Royal Dutch Shell and Chevron plan to spend a combined $10 billion this year in American shale.
A pioneer of the U.S. shale revolution, Paul Basinski, wants to take fracking to America’s final frontier – Alaska.
A significant, years-long oil supply crunch may be approaching due to insufficient investment in exploration and production, Hess CEO John Hess said at the IHS CERAWeek, and this will begin showing up in declining offshore supply. He added that “The shale business is back in business and starting to grow again,” but such growth in US shale would not be enough to meet global oil demand, which the International Energy Agency has projected to grow between 1.4-1.6 million barrels a day over this year and the next.
Since 2013, the average wellhead break-even price (BEP) for key shale plays has decreased from $80 a barrel to $35/bbl. This represents a drop of over 55%, on average. The wellhead BEP decreased across all key shale plays, with Permian Midland falling by over 60% from $98/bbl in 2013 to $38/bbl in 2016 (for horizontal wells only). Rystad Energy forecasts an average WTI oil price of $60/bbl, which implies a 40% improvement in the cash from operations. This improvement will result in higher investments of the shale operators.
For every dollar invested this year in North American shale plays another dollar will be allocated for planned projects offshore racking up spending of $70 billion in each sector, analysts at Rystad Energy said: “Offshore projects that were uncommercial at $110 per barrel in 2013 are now commercial at an oil price of $50 per barrel.” However, Rigzone Data Services said offshore investment declined 30-35% in 2016 and offshore capital expenditure is expected to decline for the current year. According to Diamond Offshore, it’s difficult for deepwater operators to compete with the unconventional space.
DetailsRecord prices for drilling rights in the Permian Basin, the most fertile U.S. shale field – where wells can generate profit with crude selling for less than $40 a barrel – are prompting oil companies and private equity investors to look elsewhere for the next big gushers. Explorers eager to tap the basin’s mile-thick stack of oil-soaked rock layers have paid as much as $60,000 an acre. That marks a 50-fold explosion in deal prices over four years. It also pushes the cost 10 times higher than in the Bakken of North Dakota.
DetailsAfter the biggest oil-market deal in a decade, OPEC faces a new balancing act in 2017: boosting prices without igniting shale. But the biggest threat to OPEC’s plan could come from within: if Nigeria and Libya were to reach their potential next year, then their additional barrels would almost wipe out OPEC’s supply cuts; and Iran could be making up for several years of sanctions. Another challenge could come from the now leaner and more efficient U.S. drillers – a bigger boost in prices could mean a million-barrel shale surge.
DetailsThe Wolfcamp shale in the Texas’ Permian Basin province contains an estimated 20 billion barrels of oil, 16 trillion cubic feet of associated natural gas, and 1.6 billion barrels of natural gas liquids. “The fact that this is the largest assessment of continuous oil we have ever done just goes to show that, even in areas that have produced billions of barrels of oil, there is still the potential to find billions more,” said Walter Guidroz, program coordinator for the U.S.Geological Survey Energy Resources Programme.
DetailsVery informative charts help illustrate the extent to which the Permian basin is outstripping its rivals in terms of investor interest and deal flow. Confidence is not only illustrated in merger and acquisitions activity but also in how much companies are currently willing to invest in their own future. Capital expenditure plans are lower and less bullish than a year before, but operators are still displaying a greater level of confidence in being able to fund robust capex spends.
DetailsNimble U.S. shale oil producers continue to show an uncanny ability to squeeze more and more crude from new wells, allowing them to do more with less as they try to weather another dip in oil prices to $40 a barrel, so they are still seeing output gains from improved well designs and fracking techniques. The pace of innovation is increasing. Pioneer Natural Resources said it was introducing its third generation of well completion techniques, called version 3.0, using even more sand and water than the super-sized volumes introduced as version 2.0 earlier in the price crash to pull more oil out of rock. For its part, Devon Energy Corp has cut costs to drill and complete new wells by 40 percent and plans to cut $1 billion in costs this year.
DetailsOil’s rebound from the lowest level in more than 12 years may face an abrupt halt as prices near a level that could trigger a wave of new U.S. shale production. Futures in New York have advanced more than 60% since the February low and closed at $43.73 a barrel Friday 22nd March, the highest in five months, nearing a $45-level IG Ltd. says makes some shale plays profitable. Drilled, uncompleted wells could return 500,000 barrels of oil per day back to the market, according to Richard Westerdale, a director at the U.S. State Department’s Bureau of Energy Resources. The inventory of wells is known as the fraclog. “Once we start approaching $45 and above, the risk of a much sharper pullback starts to increase as a lot of shale becomes profitable again,” Angus Nicholson, an analyst at IG in Melbourne, said by phone.
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