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Released January 22, 2018 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Stronger demand and higher prices for crude oil and natural gas prices are driving increased investment in Oil & Gas Production facilities and Infrastructure, particularly in Texas and Oklahoma, home to two of the hottest unconventional plays in the U.S. The Permian Basin, located in west Texas and southeastern New Mexico, and the Anadarko Basin, in northeast Texas and western Oklahoma, are expected to see tens of billions of dollars of oil & gas projects begin construction this year, according to Industrial Info's Global Marketing Intelligence (GMI) Integrated Platform.
In its most recent Short-Term Energy Outlook (STEO), the U.S. Energy Information Administration predicted that overall U.S. crude oil production will rise nearly a million barrels per day (BBL/d) this year compared with 2017. Next year, a further gain of more than 500,000 BBL/d is expected. Rising global demand has firmed prices for West Texas Intermediate crude oil, which the EIA expects to rise by about $5 per barrel this year, following a nearly $7 per barrel jump in 2017 over 2016 prices. A further increase averaging about $2 per barrel is forecast for 2019, the EIA said.
Click on the icon at right to see EIA's crude-oil production estimate.
Natural gas prices also rose last year, by about 50 cents per thousand cubic feet (Mcf), to about $3.10, the EIA said in its most recent STEO, released January 9. Prices are expected to slip a bit this year before rising in 2019, the agency added. Gas production is expected to increase about 7 billion cubic feet per day (Bcf/d) this year, nearly a 10% jump, and a smaller gain is predicted for 2019, the agency said.
"The Permian and Anadarko basins are drawing a lot of interest, both from producers and midstream companies," remarked Jesus Davis, Industrial Info's vice president of research for the oil & gas production, pipelines and terminals industries. "We don't expect to see all announced projects begin construction according to their schedule, but there's no shortage of oil & gas dollars flowing into Texas and Oklahoma right now."
Texas is benefitting from increased investment in production as well as pipelines, processing facilities and liquefied natural gas (LNG) export terminals. Industrial Info's GMI Integrated Platform is tracking about 180 oil & gas production, processing and pipeline projects in the Lone Star State, with a collective value of about $30 billion, which are scheduled to begin construction this year.
Texas is home to the Permian Basin, the Eagle Ford Shale, and a portion of the Anadarko basin. Western Oklahoma, which sits atop the rest of the Anadarko Basin, is home to about 47 production and infrastructure projects with a collective value of about $2.54 billion.
Crude oil production in the Permian and Anadarko regions continues to rise, according to EIA's December Drilling Productivity Report. And those growing production volumes are being achieved with far fewer rigs, a sign of the productivity gains the industry has achieved.
Click on the icons at right to see crude oil production from the Anadarko and Permian basins.
In 2014, new oil production per rig in the Permian was about 200 BBL/d, and more than 700 rigs were drilling for oil in that area. But now, initial production (IP) rates there are more than 600 BBL/d, and less than 400 rigs are operating there. The same efficiency story is playing out in the Anadarko Basin: higher IP rates and fewer rigs.
Click on the icons at right to see new well production rates and rig counts for the Permian and Anadarko basins.
Efficiency gains are the big story in the Permian and Anadarko basins, noted Bernadette Johnson, a vice president of market intelligence for Drillinginfo (Austin, Texas). "Across the nation now, we're using about 1,050 rigs now, down from about 2,000 right before the [2014] crash. But production is higher now than it was then. I don't think we'll ever get back to 2,000 rigs again because of increased efficiencies," she said in an interview.
She said the Permian and Anadarko basins have seen the greatest jump in IP rates per well. New oil wells in the Permian produced about 650 BBL/d in their first month last year, up from less than 200 BBL/d in 2012 and about 450 BBL/d in 2015, according to Drillinginfo's data. On the gas side, new wells in the Permian now produce about 1.3 Bcf/d, up from about 300 million cubic feet per day (MMcf/d) in 2012 and about 800 MMcf/d in 2015.
In the Anadarko basin, IP rates were slightly over 300 BBL/d in 2017, up from about 100 BBL/d in 2012 and 225 BBL/d in 2015.
"I expect we'll see further efficiency gains, mainly in the completion stage," Johnson predicted. "The increased number of frac stages, the longer laterals and the increased volumes of frac sand used continue to drive higher IP rates."
Producers in the Permian need to continue drilling to hold their acreage, which, along with strong demand and higher prices, is expected to help drive heightened project activity in that area this year, she added.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
In its most recent Short-Term Energy Outlook (STEO), the U.S. Energy Information Administration predicted that overall U.S. crude oil production will rise nearly a million barrels per day (BBL/d) this year compared with 2017. Next year, a further gain of more than 500,000 BBL/d is expected. Rising global demand has firmed prices for West Texas Intermediate crude oil, which the EIA expects to rise by about $5 per barrel this year, following a nearly $7 per barrel jump in 2017 over 2016 prices. A further increase averaging about $2 per barrel is forecast for 2019, the EIA said.
Natural gas prices also rose last year, by about 50 cents per thousand cubic feet (Mcf), to about $3.10, the EIA said in its most recent STEO, released January 9. Prices are expected to slip a bit this year before rising in 2019, the agency added. Gas production is expected to increase about 7 billion cubic feet per day (Bcf/d) this year, nearly a 10% jump, and a smaller gain is predicted for 2019, the agency said.
"The Permian and Anadarko basins are drawing a lot of interest, both from producers and midstream companies," remarked Jesus Davis, Industrial Info's vice president of research for the oil & gas production, pipelines and terminals industries. "We don't expect to see all announced projects begin construction according to their schedule, but there's no shortage of oil & gas dollars flowing into Texas and Oklahoma right now."
Texas is benefitting from increased investment in production as well as pipelines, processing facilities and liquefied natural gas (LNG) export terminals. Industrial Info's GMI Integrated Platform is tracking about 180 oil & gas production, processing and pipeline projects in the Lone Star State, with a collective value of about $30 billion, which are scheduled to begin construction this year.
Texas is home to the Permian Basin, the Eagle Ford Shale, and a portion of the Anadarko basin. Western Oklahoma, which sits atop the rest of the Anadarko Basin, is home to about 47 production and infrastructure projects with a collective value of about $2.54 billion.
Crude oil production in the Permian and Anadarko regions continues to rise, according to EIA's December Drilling Productivity Report. And those growing production volumes are being achieved with far fewer rigs, a sign of the productivity gains the industry has achieved.
In 2014, new oil production per rig in the Permian was about 200 BBL/d, and more than 700 rigs were drilling for oil in that area. But now, initial production (IP) rates there are more than 600 BBL/d, and less than 400 rigs are operating there. The same efficiency story is playing out in the Anadarko Basin: higher IP rates and fewer rigs.
Efficiency gains are the big story in the Permian and Anadarko basins, noted Bernadette Johnson, a vice president of market intelligence for Drillinginfo (Austin, Texas). "Across the nation now, we're using about 1,050 rigs now, down from about 2,000 right before the [2014] crash. But production is higher now than it was then. I don't think we'll ever get back to 2,000 rigs again because of increased efficiencies," she said in an interview.
She said the Permian and Anadarko basins have seen the greatest jump in IP rates per well. New oil wells in the Permian produced about 650 BBL/d in their first month last year, up from less than 200 BBL/d in 2012 and about 450 BBL/d in 2015, according to Drillinginfo's data. On the gas side, new wells in the Permian now produce about 1.3 Bcf/d, up from about 300 million cubic feet per day (MMcf/d) in 2012 and about 800 MMcf/d in 2015.
In the Anadarko basin, IP rates were slightly over 300 BBL/d in 2017, up from about 100 BBL/d in 2012 and 225 BBL/d in 2015.
"I expect we'll see further efficiency gains, mainly in the completion stage," Johnson predicted. "The increased number of frac stages, the longer laterals and the increased volumes of frac sand used continue to drive higher IP rates."
Producers in the Permian need to continue drilling to hold their acreage, which, along with strong demand and higher prices, is expected to help drive heightened project activity in that area this year, she added.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
