by Dennis Coyne
I have updated my scenarios for US LTO output, based on both EIA tight oil output data and average well profile data from Enno Peters’ shaleprofile.com. I have also created a scenario for the Niobrara shale oil play and for “other US LTO” which excludes the Permian Basin LTO, Eagle Ford, North Dakota Bakken/Three Forks, and the Niobrara.
This is NOT a non-petroleum open thread, see post below for those comments.
Comments on oil and natural gas output should be in this thread, thank you.
2017 was the highest producing year for oil in the GoM and included the record month in March. Gas, which has tended to come from shallow water wells, had accelerated decline. The production would have been higher but for some disruptions from Hurricanes, in particular Nate, though that had the least impact onshore, and some unplanned outages in November and December due to equipment failures. The failure to Delta House subsea manifold affected Rigel, Otis and Son of Bluto 2 fields, and the first two still appear to be off-line while Son of Bluto 2 resumed production in December (LLOG, the operator, I think calls the Rigel field Neidermeyer, which is much better for the Animal House theme). The Enchilada gas pipeline appears to have ruptured at the main platform and has resulted in Baldpate, Salsa, Llano, Cardamom and Magnolia going off-line. Plans were recently announced to restart Baldpate/Salsa, which do not go through the platform, but I haven’t seen any notice of the restart.
|
|
Oil Average |
Oil Exit Rate |
Gas Average |
Gas Exit Rate |
Total Average |
Total Exit Rate |
| (kbpd) | (kbpd) | (mmscfd) | (mmscfd) | (kboed) | (kboed) | |
2016 |
1600 | 1728 | 3308 | 3363 | 2151 | 2289 |
2017 |
1685 | 1570 | 2955 | 2381 | 2177 | 1967 |
Change |
85 | -158 | -354 | -982 | 26 | -322 |
Ratio |
5.3% | -9.1% | -10.7% | -29.2% | 1.2% | -14.1% |
December production numbers were dominated by the unplanned outages, so comparisons with November don’t mean much. As well as the two issues given above the Tahiti and Caesar/Tonga fields were off line for a few weeks, though I have seen no news why (these share a common set of leases but are produced separately to the Tahiti and Constitution platforms). Each month that these are three issues hold current outages would knock about 10 to 12 kbpd off the achievable average production for 2018.
Despite recent variability it certainly looks like the new fields brought on since late 2013, and which have seen all the net growth since then, have peaked. Any average decline rate can’t really be extrapolated yet, given the recent upsets, but the BOEM reserve estimate updates, due in the next couple of months, will provide better R/P numbers as there will be longer operating data for all the fields.
From Dec 2016 to Dec 2017 US Tight oil output has increased by 975 kb/d based on US tight oil output data from the EIA.
For the entire US we only have EIA monthly output estimates through Oct 2017. Over the Dec 2016 to Oct 2017 period US output has increased by 866 kb/d and the OLS trend has a slope of 821 kb/d.
Note that the 866 kb/d increase in US output over 10 months would be a 1040 kb/d increase over a 12 month period.
Most of the increase in US output has been from increased LTO output. The forecasts by several agencies (EIA, IEA, and OPEC) of more than a 1000 kb/d increase in US output in 2018 may assume that the recently increased oil price level will lead to increased investment in the oil sector.
Much of the increase in LTO output has been in the Permian basin and several factors may slow down the recent rapid growth. Among these are limited fracking crews, inadequate pipeline capacity for natural gas, which will limit output as flaring limits are reached, and potential water shortages.
Longer term the various LTO plays will run out of space to drill more wells in the tier one areas (the so-called sweet-spots) and this will limit the rate of increase within 2 or 3 years. It is likely that the Eagle Ford is close to this point, the Bakken might reach that point by 2019, and the Permian basin perhaps by 2021.
For US C+C output, I expect about a 600+/-100 kb/d increase in 2018.
GoM C&C production for July by BOEM was 1746 kbpd and by EIA 1761, compared with, respectively, 1631 and 1634 kbpd (corrected) in June. The EIA number is a new peak, the BOEM one is still 24 kbpd short of their March numbers. The growth was from Thunder Horse (partially), Constitution and Baldpate/Salsa (which is mostly gas) coming back on-line, plus continued ramp-up in Stones and Marmalard.
