United States of America (USA) Lower 48 Unconventional Oil and Gas (Major Shale Plays) Market Analysis, Trends, Competitive Benchmarking, Deals and Forecast, 2019-2025

Pages: 42 Published: March 31, 2022 Report Code: GDGE0401MAR

Crude oil production in the United States (US) has recovered considerably from the lows seen during the first wave of the COVID-19 pandemic and the brief price war between Saudi Arabia and Russia. Nevertheless, as most countries have eased the COVID-19 restrictions that were in place earlier, the global crude demand is anticipated to rise over the coming months. In line with this demand growth, US crude oil production is also anticipated to rise further and might reach the pre-pandemic levels by 2023.

Oil prices were on an upward trend even before the start of the Russia-Ukraine war as global demand was projected to outweigh supply in 2022. Since then, several companies, including oil majors, such as BP, Shell, and ExxonMobil have decided to exit from the Russian oil and gas industry amid concerns over Western sanctions. Moreover, all major shale drillers in the US have raised their planned annual capex for 2022, which could drive production growth in the region over the coming months.

What is the crude oil production outlook of the unconventional production market in US lower 48?

The total crude oil production across four major shale plays is expected to surpass pre-COVID levels in 2022 and then maintain an upward trend during the outlook period. In the near term, the production increase is likely to be driven by the recent improvement in oil prices amid rising global energy demand and the military conflict between Russia and Ukraine. Moreover, easing of COVID-19 infections and favorable fiscal regimes worldwide could spur global economic recovery, thereby potentially supporting crude production growth till 2025.

Crude Oil Production Outlook by Major Shale Plays

Crude Oil Production Outlook by Major Shale Plays

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What is the natural gas production outlook of the unconventional production market in US lower 48?

Natural gas production across four major gas shales grew annually in 2021, driven primarily by the sustained rise in energy demand from the industrial sector. The cumulative natural gas production from four major gas shales is expected to grow steadily till 2025. The biggest growth in natural gas production is expected to be generated from the Utica shale.

The Haynesville shale accounted for nearly a quarter of the total production from the four major shales in 2021. In contrast, natural gas production from the Barnett shale is expected to decline during the outlook period.

Natural Gas Production Outlook by Major Shale Plays

Natural Gas Production Outlook by Major Shale Plays

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What are the major developments and trends in the unconventional production market in US lower 48?

The major developments and trends in the unconventional production market in US lower 48 are as follows:

Well development activity

Well development in the US L48 shale plays picked up considerably in 2021 after a recovery in oil prices. New wells were developed across the major US shale plays in 2021, which was nearly three times the count in 2020. The Permian Basin registered the highest well development activity over this period. Among gas shales, Marcellus attracted the highest number of operators for well development in 2021.

Rig count activity

As per the Energy Information Administration (EIA) data, 332 rigs were operational across major shale plays in January 2021, a significant drop from the 716 active rigs in January 2020. However, with the improvement in oil prices, the rig count is also expected to increase by January 2022.

Drilled uncompleted wells

In February 2021, the well completion count decreased as an unprecedented winter storm prompted operators to withdraw drilling and completion crews from several parts of the US. On the other hand, the count of wells drilled but uncompleted (DUC) saw a decline during this period as operators focused on lifting production from existing wells to conserve capital.

Well permits

A total of 17,380 new permits were filed across major US shales from January 2021 to February 2022. More than half of these permits were filed for wells in the Permian Basin. Permit activity was relatively steady across other major plays in the L48.

Deals

Rising oil prices and easing uncertainty over global energy demand supported the annual increase in deal volume in 2021. The biggest deal, in terms of value, was executed by ConocoPhillips when it acquired Permian Basin assets from Shell in 2021. The merger of Cabot Oil & Gas with Cimarex Energy was also a significant deal in 2021. These deals are indicative of a recovery in production economics in the US shales following the crash in oil prices in 2020.

Which are the major companies in the unconventional production market in the US lower 48?

The major companies in the unconventional production market in the US lower 48 are Exxon Mobil Corp, Chevron Corp, BP Plc, Equinor ASA, ConocoPhillips, EOG Resources Inc, Repsol SA, Occidental Petroleum Corp, Pioneer Natural Resources Co, and Hess Corp.

Market Report Scope

Major shale plays of crude oil production Permian Basin, Eagle Ford, Bakken, and DJ Basin
Major shale plays of natural gas production Marcellus, Utica, Haynesville, and Barnett
Major recent developments and trends Well Development Activity, Rig Count Activity, Drilled Uncompleted Wells, Well Permits, and Deals
Major companies Exxon Mobil Corp, Chevron Corp, BP Plc, Equinor ASA, ConocoPhillips, EOG Resources Inc, Repsol SA, Occidental Petroleum Corp, Pioneer Natural Resources Co, and Hess Corp

Scope

  • The report analyses 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 in US L48 shale plays during 2019-25
  • Detailed information on well development, permits, and deals across US L48 shale plays in 2021
  • In-depth information on 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 2021
  • Up-to-date information on major mergers and acquisitions across major shale plays during 2021

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 across major shale plays
  • Identify opportunities and challenges across major US shale plays

Table of Contents

Table of Contents

1. Major Developments in the US Lower 48, 2021 5

2. US Lower 48, Historical Production and Short-Term Outlook 7

2.1 US Lower 48, Historical Production and Short-Term Outlook, 2019–2025 7

3. US Lower 48, Recent Developments and Trends among Major Shale Plays 9

3.1 Well Development Activity, January–November 2021 9

3.2 Rig Count Activity, January 2021 – January 2022 10

3.3 Drilled Uncompleted Wells, January 2021 – January 2022 11

3.4 Well Permits, January 2021 – February 2022 12

3.5 Deals, January 2021 – February 2022 13

4. US Lower 48, Economic Viability 14

4.1 Crude Oil Breakeven Price by Major Shale Plays 14

4.2 Natural Gas Breakeven Price by Major Shale Plays 15

4.3 US Lower 48, Well Productivity 16

4.4 US Lower 48, Well Completion 20

4.5 US Lower 48, Cost Trend 23

5. US Lower 48, Analysis of Top Companies 26

5.1 Total Net Acreage of Major Operators, 2022 26

5.2 Hydrocarbon Production of Major Companies, 2021 28

5.3 Planned Capital Expenditure for Major Operators in 2022 31

5.4 Break-even Crude Oil Price of Major Operators 32

5.5 Break-even Gas Price of Major Operators 33

6. Mergers and Acquisition Activity in the US Lower 48, 2021–2022 35

6.1 Overview of M&A Activity 35

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List of Tables

List of Tables

Table 1: Net acreage of the major companies across various US shales, 2022 (net acres) 26

Table 2: Crude oil and condensate production of major operators by shale plays, 2021 (mbd) 29

Table 3: Natural gas production of major operators by shale plays, 2021 (mmcfd) 30

Table 4: Planned Capital Expenditure by Major Companies, 2021-22 ($ million) 31

Table 5: Crude oil break-even prices of major operators by shale plays, 2022 ($/bbl) 32

Table 6: Natural gas break-even prices of major operators by shale plays, 2022 ($/mcf) 33

Table 7: US Lower 48, Major Deals by Oil and Gas Companies, 2021–2022 39“

List of Figures

List of Figures

Figure 1: Crude oil production in the US, 2018-2022 5

Figure 2: Rig count in the US shale and WTI price trend, 2018-2022 6

Figure 3: Crude oil production outlook across major shale plays, 2019–2025 7

Figure 4: Natural gas production across major shale plays, 2019–2025 8

Figure 5: Wells developed across major US shale plays, January–November 2021 9

Figure 6: Rig count across major US shale plays, January 2021 – January 2022 10

Figure 7: Count of DUC and wells completed across major shale plays, January 2021– January 2022 11

Figure 8: Well permits in major shale plays, January 2021 – February 2022 12

Figure 9: Deals announced in major shale plays, January 2021 – February 2022 13

Figure 10: Crude oil break-even price across major US oil shales, January 2019 till date 14

Figure 11: Natural gas break-even price across major US gas shales, January 2019 till date 15

Figure 12: Crude oil IP30 rates of major shale plays, January 2020 – December 2021 16

Figure 13: Natural gas IP30 rates of major shale plays, January 2020 – December 2021 17

Figure 14: Crude oil EUR by major shale plays, January 2020 – December 2021 18

Figure 15: Natural gas EUR by major shale plays, January 2020 – December 2021 19

Figure 16: Average lateral length by major shale plays, January 2020 – December 2021 20

Figure 17: Average proppant mass by major shale plays, January 2020 – December 2021 21

Figure 18: Average proppant mass per lateral length by major shale plays, January 2020 – December 2021 22

Figure 19: Average well costs by major shale plays, January 2020 – December 2021 23

Figure 20: Average well costs per lateral length by major shale plays, January 2020 – December 2021 24

Figure 21: Average production cost by major shale plays, January 2020 – December 2021 25

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