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Production, Rig Count Surge As Exxon Bets Big On U.S. Shale
Production, Rig Count Surge As Exxon Bets Big On U.S. Shale
US oil rig counts rose for the7th straight week (up 7 to 609) to the highest level since October 2015.
With production surging back above 9mm b/d – the highest in a year – the trend in the rig count implies considerably more production to come…
And it’s all in the Permian…
And with rig counts rising (in the Permian), production shows no signs of slowing, as OilPrice.com’s Nick Cunningham notes, ExxonMobil’s new CEO Darren Woods announced a dramatic shift towards shale drilling this week, a new strategy that will prioritize drilling thousands of smaller wells while reducing spending on the massive projects that the oil major has long been accustomed to pursuing.
Mr. Woods gave a presentation to investors on March 1, selling his vision after recently taking over from Rex Tillerson, who left to become U.S. Secretary of State. Exxon will now ramp up spending on shale drilling, after watching dozens of smaller companies profit from the surge in production in Texas, North Dakota and elsewhere over the past decade.
Exxon will dedicate a quarter of its 2017 spending budget on shale, putting $5.5 billion into the effort. “More than one quarter of the planned spending this year will be made in high-value, short-cycle opportunities, including in the Permian and Bakken basins,” Exxon wrote in a March 1 statement. The oil major says that it has 5,500 wells in its queue for drilling in the Permian and the Bakken shales, each with a return of 10 percent or more at $40 per barrel.
Exxon was able to build up this inventory of shale wells with the $6.6 billion it spent in January to double its Permian acreage.
The shift towards shale should pay off over time, with a portfolio of thousands of tiny shale wells making up a growing share of the oil major’s production portfolio.
…click on the above link to read the rest of the article…
Crude Surges After Surprise Inventory Draw, Biggest Production Decline Since 2013
Crude Surges After Surprise Inventory Draw, Biggest Production Decline Since 2013
Total US crude production slumped over 1.5% last week – the biggest decline since October 2013.
Add to that a considerable inventory draw of over 4.2mm barrels (against expectations of a build)…
and crude prices are surging.
Charts: Bloomberg
Increased U.S. Output Bolsters Oil Glut Fears Sending Prices Back Down
Increased U.S. Output Bolsters Oil Glut Fears Sending Prices Back Down
Oil resumed its decline after the biggest gain since June 2012 as U.S. crude production increased, adding to signs that the global supply glut that has pushed prices to a 5 1/2-year low will persist.
West Texas Intermediate futures dropped as much as 2.7 percent in New York. U.S. output surged to 9.19 million barrels a day last week, the fastest pace in weekly records dating back to January 1983, the Energy Information Administration reported yesterday. The Swiss National Bank gave up its minimum exchange rate against the euro, a policy that was intended to shield its economy from the region’s sovereign debt crisis.
Crude slid almost 50 percent last year, the most since the 2008 financial crisis, as the Organization of Petroleum Exporting Countries resisted cuts to output amid the U.S. shale boom, exacerbating a surplus estimated by Kuwait at 1.8 million barrels a day.
Oil is leading this week’s slide in commodities after a decade-long bull market led companies to boost production and a stronger dollar diminished their allure to investors. The Bloomberg Commodity Index of 22 energy, agriculture and metal products declined yesterday to the lowest level since 2002, extending a 17 percent loss last year. OPEC will release its monthly report later today.
…click on the above link to read the rest of the article…
