Doug Suttles, Encana president and chief executive officer (left), and Lee Tillman, Marathon Oil president and chief executive officer, took part in a panel discussion covering the latest in North American shale at CERAWeek by IHS Markit in Houston. Much has been made recently about the disparities in production between parent and child wells in US shale basins. The increased attention on the issue is part of broader concern among investors about the ability of operators to maintain high levels of output over the next few years. However, Doug Suttles, Encana president and chief executive officer, assures that shale executives are acutely aware of the parent-child challenge. His company has been "very public about this for 5 years now,” he said before an audience largely consisting of the investor community at CERAWeek by IHS Markit this week in Houston.
ExxonMobil and Chevron revealed plans 5 March that would result in combined production from the US majors of nearly 2 million BOE/D from the Permian Basin of West Texas and southeastern New Mexico by the mid-2020s. Irving, Texas-based ExxonMobil revised upward its Permian production outlook by almost 80% to reach 1 million BOE/D by as early as 2024. The operator said its resource base in the basin totals 10 billion BOE. San Ramon, California-based Chevron expects its output from the basin to rise to 600,000 BOE/D by yearend 2020 before hitting 900,000 BOE/D by yearend 2023. The company said it has added some 7 billion BOE in Permian resources over the last 2 years.
You have access to this full article to experience the outstanding content available to SPE members and JPT subscribers. To ensure continued access to JPT's content, please Sign In, JOIN SPE, or Subscribe to JPT For the average oil and gas technical professional who spends hours each day scrutinizing the details, it is easy to forget the big picture. Solving the latest engineering problem comes first. Then comes solving the next one. And the problems are unique to each person and their job function.
The first completed row in Noble’s 75,000-acre Mustang project in the DJ Basin produced 26,000 BOE/D, of which 60% was oil, during fourth quarter 2018, the independent reported in its year-end earnings call. The row consists of 31 wells. Bolstered in part by row development, the firm’s overall DJ oil and gas output increased 10% during the quarter and 15% for the year. The row development process is a systematic, manufacturing approach to completing a high number of wells over a large, contiguous land position. Wells are completed sequentially down a row, row by row, near existing gathering and processing infrastructure, much of which is owned by the company.
Chesapeake Energy is partnering with RS Energy Group to improve operational efficiency and capital discipline by employing advanced analytics and machine learning. RS Energy is a Calgary-based energy research firm founded in 1998 covering more than 150 operators in the major North American and international oil and gas regions, including the US shale plays. It provides technical analysis of basins, including completions and production, as well as asset evaluations for operators considering acreage additions. All of this is done within the context of shifting capital markets. Chesapeake announced the pact fresh off its $4-billion merger with WildHorse Resource Development, which bolstered its position in the Eagle Ford Shale of South Texas.
Last year marked a return to relevance for the Eagle Ford Shale. Crude production from the south Texas play climbed steadily throughout the year and continued to achieve its highest marks ever. New, upstart independents came back to the region, including one led by the former head of Occidental Petroleum, as investors looked beyond the neighboring Permian Basin with its crowded top-tier acreage and pipelines. And operators began joining forces to increase the scale of their operations, headlined by Chesapeake Energy’s merger with Wildhorse Resource Development. When it comes to what makes the play attractive, there is one constant: “In our business it all starts with the rock,” said Russell Parker, EP Energy chief executive officer.
What Happened to all the E&P Deal-Making? One of last year’s big stories in the industry was consolidation among several of the larger upstream operators. Firms such as BP, Concho Resources, Diamondback Energy, Encana, and Chesapeake Energy took advantage of consistently higher oil prices and added swaths of acreage in the most prospective and productive US onshore basins—in many cases doubling down on their positions in those basins. Price stability is crucial for nurturing an active acquisition & divestiture (A&D) environment. After all, deals rely on the seller and buyer agreeing on the value of an asset.
A bulk of near-term output will come domestically, but the subsidiary of state-owned China National Offshore Oil Corporation is leaning on its international projects to boost production longer-term. The company said it expects to produce 1.33 million BOE/D in 2019, an increase of 2% from its 2018 average, with domestic output accounting for 67% of this year’s production. The ExxonMobil-operated Guyana consortium has tallied 10 discoveries to date. CNOOC expects six new projects to come on stream this year. The four other projects are the Shell-operated Appomattox project in the US gulf and CNOOC’s Bozhong 34-9 oil field, Caofeidian 11-1/11-6 comprehensive adjustment project, and Wenchang 13-2 comprehensive adjustment project off China.
How Are Oil and Gas Firms Approaching Digital Investment, Implementation? Leveraging new digital technology, Equinor recently opened two onshore support centers in Norway. All of the firm’s operated fields on the Norwegian Continental Shelf will be managed from onshore facilities by 2021. Digital technologies have become an integral part of capital budgets for oil and gas operators. This fact is driven home by a recent survey in which 9 in 10 executives from the industry in the US and abroad said they plan to increase spending on digital tools over the next 2 years.