Specialist
Former advisor at Diamondback Energy Inc
Agenda
- Basin-level and aggregated outlook for US oil production
- Impact of shut-in production, DUC inventory and well efficiency improvements
- Spectrum of breakeven oil prices across US lower 48 states
- Trends in shale completion designs and targeted geological zones
Questions
1.
How are you assessing the US oil industry’s response to the coronavirus and the negative prices in April 2020?
2.
Have there been any issues in restarting shut-in production volumes? A lot of producers announced during Q2 2020 that production would be shut in. What are the general challenges in restarting curtailed volumes?
3.
What is your 2021 outlook for the US oil supply, all things considered?
4.
How would you rank the different oil basins in the US in their ability to recover?
5.
Could you elaborate on the Eagle Ford and closing in all the tier 1 acres being fully developed? What is the difference in productivity or break-even between tier 1 and tier 2 acreage? Are there any other issues here?
6.
In March 2015, the DPR [Drilling Productivity Report] has Eagle Ford peaking at 1.721 million barrels of oil per day, and most recently it was at 1.127 million. What can operators do to extend the life and turn the Eagle Ford’s growth around? Is there any kind of innovation to implement or will it clearly be a tier 2 basin and well past its peak?
7.
The Bakken had a peak at about 1.5 million barrels a day in November 2019 and it’s about 1.2 million most recently. Could the Bakken get back to a higher level of production than in November 2019?
8.
The Permian rig count is down to about 125. Where do you expect production to level out to in a year’s time if that level of drilling were to hold?
9.
Could you elaborate on the parent-child issues and what you said about the wells creating a pressure sink? Is there a way to quantify the impact of how long a production well is on the recovery of the incremental wells or the child wells? The sooner the production comes online, the better, as you said. How far down do you think recovery would be if waiting 1-2 years to drill a child well?
10.
When you said some of the DUCs [drilled-but-uncompleted wells] in the Permian won’t get completed at all, is that a parent-child issue? Is it a certain area or type of rock where the DUCs won’t get completed?
11.
We’ve been drilling the shale wells in the Midland for a while now, so how has H2S [hydrogen sulphide] been managed here and is the situation likely to get worse or better?
12.
How are you thinking about midstream issues? You briefly mentioned Dakota Access Pipeline, but do you think this will become an ongoing problem that weighs on production? Despite production volumes falling, is there enough pipeline capacity so that the Dakota Access Pipeline ends up not being a big deal?
13.
Should we be monitoring any other big operators as potentially important drivers of the US oil outlook?
14.
How does the restructuring of the oilfield services industry impact your outlook?
15.
Hypothetically, if oil prices were to recover like they did in late 2016 and 2017 when OPEC [Organization of the Petroleum Exporting Countries] came together, do you think the USA oil supply response would be similar, and why?
16.
How does consolidation impact your outlook for US oil supply? There was the Devon-WPX announcement yesterday and you’ve mentioned Chevron and Noble, plus Occidental and Anadarko.
17.
ExxonMobil and Chevron have made increased organic investments in the US, and Chevron is buying Noble with its positions in the DJ and the Permian. What are their prospects in upstream North America?
18.
What are your thoughts on the break-even oil price for the US? Could you break it down by the most important basins for the Permian?
19.
How do you think about the futures market for planning any drilling activity? Have you found it reliable? 2021 WTI [West Texas Intermediate] is around USD 42, a little higher in 2022. Does this give you any good indication of what the price is likely to be and what degree of activity to expect?
20.
We have seen earlier this year several producers called on the Texas Railroad Commission to regulate production in Texas and President Trump intervened when the oil price went negative in getting OPEC and Russia together. Do you think November’s presidential election will impact the outlook for US oil supply, and which areas could be more at risk?
