Unconventional (Oil and Gas) Production in the US Lower 48, 2020 Update

As a result of crude oil price crash followed by the economic crisis sparked by Covid-19, crude oil demand has plummeted due to restricted mobility as lockdown measures were implemented. Operators were swift to readjust their capital and production guidance for the year of 2020. From a list of 17 operators, the total capital expenditure cut sums up to approximately US$ 38 billion, with Exxon leading the cut with US$ 10 billion followed by Chevron with US$ 6 billion. However, Occidental Petroleum has the biggest percentage cut of 55%. The withdrawal of investments in development plan in US Lower 48 states has led to a decline in production in 2020. The oil production cuts intensified during Q2 2020 with Permian Basin experienced the biggest decline in crude oil, summing up to approximate 1 million barrels a day (mmbd). As for the natural gas decline, Permian and Eagle Ford contribute to approximately 3.5 billion cubic feet per day (bcfd) and 1 bcfd as a result of oil well production curtailment.

Scope

The report analyzes the crude oil and natural gas appraisal and production activities in the US Lower 48 shale plays. The scope of the report includes:

Comprehensive analysis of crude oil and natural gas historical production and short term outlook across major shale plays during 2019–2021

Detailed information of impact on well development, permits and deals due to COVID–19 pandemic

In-depth information of economic viability, well productivity and well completion parameters across major shale plays in the US

Analysis of top companies’ net acreage, planned capital expenditure, and crude oil and natural gas break-even prices in 2020

Up-to-date information on major mergers and acquisitions across major shale plays between 2019 and 2020

Reasons to buy

Develop business strategies with the help of specific insights into the major shale plays in the US

Plan your strategies based on economic viability and expected developments in the major US shale plays

Keep yourself informed of the latest M&A activity in across major shale plays

Identify opportunities and challenges in across major US shale plays

Table of Contents

1. Major Developments in the US Lower 48 States, 2019–2020 5

1.1 Presidential Election Impact on Federal Land 5

1.2 Downturn Cycle Opportunity for Merger and Acquisition 5

1.3 USL48 Operator Reaction to Crude Oil Price Crash 6

2. US Lower 48 States, Historical Production and Short Term Outlook 8

2.1 US Lower 48 States, Historical Production and Short Term Outlook, 2019–2021 8

3. US Lower 48 States, Recent Developments and Trends of Major Shale Plays 10

3.1 Well Development Activity, January–September 2020 10

3.2 Rig Count Activity, January–September 2020 10

3.3 Drilled Uncompleted Wells, January–September 2020 11

3.4 Permits, January–September 2020 12

3.5 Deals, January–October 2020 13

4. US Lower 48 States, Economic Viability 15

4.1 Crude Oil Breakeven Price by Major Shale Plays 15

4.2 Natural Gas Breakeven Price by Major Shale Plays 15

4.3 US Lower 48 States, Well Productivity 16

4.4 US Lower 48 States, Well Completion 20

4.5 US Lower 48 States, Cost Trend 23

5. US Lower 48 States, Analysis of Top Companies 26

5.1 Total Net Acreage of Major Operators 26

5.2 Planned Capital Expenditure for Major Operators in 2020 28

5.3 Break-even Oil Price of Major Operators 30

5.4 Break-even Gas Price of Major Operators 32

6. Mergers and Acquisition Activity in the US Lower 48 States, 2019–2020 34

6.1 Overview of M&A Activity 34

6.2 Major Acquisitions 34

Contact Us 39

List of Tables

Table 1: Shale play wise net acreage of the major companies in the US, 2020 (acres) 26

Table 2: Crude oil break-even prices of major operators by shale plays, October 2020 (US$/bbl) 30

Table 3: Natural gas break-even prices of major operators by shale plays, October 2020 (US$/mcf) 32

Table 4: US Lower 48, Major Deals by Oil and Gas Companies, 2019–2020 37

List of Figures

Figure 1: Production Comparison from Independent Producers Post M&A 6

Figure 2: Capital Expenditure Guidance Readjustment, January–September 2020 7

Figure 3: Major shale plays crude oil production, 2019–2021 8

Figure 4: Major shale plays natural gas production, 2019–2021 9

Figure 5: Wells developed in major shale plays, January–September 2020 10

Figure 6: Rig count in major shale plays, January–September 2020 11

Figure 7: DUC wells count in major shale plays, January–September 2020 12

Figure 8: DUC wells count in major shale plays, January–September 2020 13

Figure 9: Deals announced in major shale plays, January–October 2020 14

Figure 10: Crude oil break-even price in major shale plays, January 2019 till date 15

Figure 11: Natural gas break-even price in major shale plays, January 2019 till date 16

Figure 12: Crude oil IP30 rates of major shale plays, January 2019 till date 17

Figure 13: Natural gas IP30 rates of major shale plays, January 2019 till date 18

Figure 14: Crude oil EUR by major shale plays, January 2019 till date 19

Figure 15: Natural gas EUR by major shale plays, January 2019 till date 20

Figure 16: Average lateral length by major shale plays, January 2019 till date 21

Figure 17: Average proppant mass by major shale plays, January 2019 till date 22

Figure 18: Average proppant mass per lateral length by major shale plays, January 2019 till date 23

Figure 19: Average well costs by major shale plays, January 2019 till date 24

Figure 20: Average well costs per lateral length by major shale plays, January 2019 till date 24

Figure 21: Average production cost by major shale plays, January 2019 till date 25

Figure 22: Planned capital expenditure by major operators, 2020 29

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