What Do More Productive Tight Oil and Gas Wells Mean for the Global Business Environment?

Abstract

Tight oil and gas in North America is making the global market more competitive. US tight oil is proving resilient at lower prices and natural gas is impacting the global LNG supply-demand balance. US natural gas production has grown by 40% over the past decade and oil production grew by more than one million barrels per day for three years in a row. The latter is a feat not matched by any country in the history of the oil industry. In addition, costs in tight oil plays fell faster and further than expected during the downturn. Further savings and better resource recovery have the potential to change the global flow of hydrocarbons. We estimate more than 250 TCF of undrilled shale gas resource is economic at prices below $3 per mmbtu and more than 25 billion barrels of tight oil will be developed at oil prices below $60 per barrel. Exploration dollars that were once spent abroad are now focused on downspacing, secondary targets, stacked pay zones, and improving completion designs. High intensity completions that utilize higher volumes of water and proppant are increasing recoveries. We use our proprietary well data to evaluate play level and sub-play level well performance across the major basins. Are geological controls in the core of the major plays or completion design more important in the best wells? We quantify the economic impact of productivity improvements realized to date and forecast what applying best practices mean for the future of global oil and gas supply.

AAPG Datapages/Search and Discovery Article #90259 ©2016 AAPG Annual Convention and Exhibition, Calgary, Alberta, Canada, June 19-22, 2016