Forecast ///

Sliding oil price necessitates more cuts and pain

James West, Samantha Hoh, Alexander Nuta, Cameron Schnier, Evercore ISI

Looking at the spending plans of roughly 300 E&P companies worldwide, and factoring in recent oil price declines, North American spending may fall 40-50% in 2016. Capital expenditures, internationally, are set to post a second, consecutive 15% decline.

Executive viewpoint

John England, Deloitte LLP

Looking back at 2015: What happened, what didn’t, and hope for the future

Oil and gas in the capitals

Dr. Anas Alhajji, Contributing Editor

Making the case for a Saudi oil production cut

What industry leaders expect for 2016

Kurt Abraham, World Oil

Not since 1986 has the global upstream industry seen such a 12-month period of oil price erosion, punctuated by rapid-fire reductions in operator, vendor and contractor activity.

Drilling falters while production and reserves register further increases

Kurt Abraham, World Oil

Low oil prices are constricting drilling activity worldwide with a couple of exceptions. Meanwhile, production and reserve levels have gained, spurred by last year’s stout drilling effort.

Mexico places hopes in reform to boost oil and gas production

Mauro Nogarin, Contributing Editor

Less than a year after the enactment of Mexico’s new energy reform law, which was promulgated in June 2014, the Director General of national oil company Pemex, Emilio Lozaya, announced significant new oil and gas discoveries in the country.

Canadian E&P striving for economic recovery

Robert Curran, Contributing Editor

In response to the prolonged oil slump, operators have slashed spending, postponed large-scale projects and laid off staff. Canada’s industry associations have downgraded their 2015 forecasts, as well.

Operators take shelter from the oil price storm

Kurt Abraham, World Oil

Although this year’s major upstream downturn is inflicting considerable pain on producers and equipment/service companies, alike, it also is stimulating additional technical creativity and progress across all disciplines of the North American industry.

Low oil prices put the brakes on the global E&P train

Pramod Kulkarni, Kurt Abraham, Roger Jordan, Steven McGinn, World Oil

An oversupplied market spells a difficult year ahead for operators, although less so for activity outside North America.

U.S. gas well numbers rise despite low prices

Kurt Abraham, World Oil

The number of producing gas wells in the U.S. rose significantly over the course of the last year, despite prices that seldom crept above $4/MBtu. In 2013, there were 485,000 active producing gas wells in the U.S. In 2014, that number rose to 514,782.

Active U.S. oil wells pass the 600,000 mark

Kurt Abraham, World Oil

The number of producing oil wells in the U.S. rose 3.5% in 2014, to an estimated 600,679. This figure is in line with the 2012-2013 improvement of 3.5%.

Oil, gas both reach production highs, but falling prices will drag output down

Kurt Abraham, World Oil

Crude oil and condensate. U.S. crude oil production surged broadly across different regions in 2014, particularly in the Bakken and Eagle Ford shale plays of North Dakota and Texas, respectively. Crude oil prices spent much of the summer of 2014 hovering above $100/bbl, which kept operators’ gaze firmly fixed on petroleum liquids. As prices declined modestly into the fall, production kept up a blistering pace, surpassing 9 MMbpd in October.

Rig counts rose in early 2014, but falling prices bring uncertainty

Kurt Abraham, World Oil

While the ongoing oil-price decline is bound to affect the U.S. rotary rig count in the coming year, 2014 saw a significant increase over the previous year—especially in the regions where one might expect that to happen. The average rig count for 2014 was above 1,860 rigs running, a 6% increase year-over-year, or about 100 rigs higher. The Permian basin of West Texas and New Mexico experienced the greatest increase in activity, with the rig count rising 16% to 17% on average, or about a 60-rig improvement. Activity in the Eagle Ford shale region of south-central Texas shot up about 35%, or an average of 16 additional rigs running for the year.

Midterm elections have favorable implications for oil and gas

Dr. Roger Bezdek, Contributing Editor

A Republican tsunami in the 2014 midterm elections could be good news for the energy industry. With solid majorities in both houses of Congress, Republicans are in a position to heavily influence the direction of U.S. energy policy. However, many new oil & gas-related regulations are being considered and implemented.

Lies, damn lies, and commodity forecasting!

David A. Pursell, Brandon Blossman, Tudor, Pickering, Holt & Co.

An $85/bbl oil price outlook is maintained for 2016, as weak oil prices, balance sheets, and significantly reduced drilling activity will create a net, non-OPEC supply decline in 2016. For North American natural gas, it is much the same story—less drilling activity makes for less gas production growth in 2016, and a much tighter market.

Harsh cuts await as the oil field slips into recession

James West, Samantha Hoh, Alexander Nuta, Cameron Schnier, Evercore ISI

E&P spending may fall below $700 billion in 2015, as budgets will be dictated by cash flow and access to capital, according to a survey of the spending plans of approximately 300 companies worldwide.

What industry leaders expect for 2015

Kurt Abraham, World Oil

The year 2014 has been a period of not only great profitability for the global upstream industry but also a time of considerable volatility.

Robust drilling leads global activity forward

Kurt Abraham, World Oil

After reaching a plateau last year, worldwide E&P activity is set to resume additional growth, led by a very strong drilling market.

North American outlook: Prosperity in the U.S. market continues

Kurt Abraham, World Oil; Robert Curran, Mauro Nogarin, Contributing Editor

Despite a variety of interfering factors, U.S. activity remains at a high level, aided by the industry’s technical and efficiency gains. Canada continues to slowly rebound on the strength of oil activity, while Mexico remains at a lower level.     

E&P spending to top $700 billion globally in 2014

James West, Barclays

Sustained high oil prices, the sanctioning of major projects and the delivery of a large number of offshore rigs, in both 2014 and 2015, are driving the projected increases in international  E&P spending.