U.S. Shale Oil Production Forecast - Sept 18

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U.S. Shale Oil Production Forecast - Sept 18

Post by dan_s »

This morning I received a well-researched white paper on why the rate of U.S. shale oil production has slowed. Without U.S. shale oil production growth, U.S. total oil production is likely to peak in less than ten years.
If you'd like to read the full report, send me an email: dmsteffens@comcast.net
The note below was sent to my research team this morning:

Five years ago, the author of the attached report made a forecast that U.S. shale oil production would keep increasing at ~2 million barrels a day and could go as high as 27 million bpd by 2030. Now he is seeing that, despite much higher oil prices, that U.S. shale oil production growth has slowed and peak U.S. oil production may be less than ten years away even if we go back to "Drill Baby Drill".

I follow close to 40 public upstream oil & gas companies. NONE of them are talking about significant increases in their drilling programs, despite very strong well-level economics. Part of the reason is that we have idiots running U.S. energy policy, but the public companies are also under pressure to live within cash flow, pay dividends and buyback stock.

This world currently has a significant oil supply shortage; as high as 3.3 million barrels per day. Without U.S. shale oil production growth, and lots of it, there is no way to meet global demand for oil-based products.

Oil prices are likely to keep going up because oil will be "rationed by price" first. If that doesn't balance supply and demand, then physical rationing will be necessary.

Lot of money will be pouring into the upstream oil & gas subsector, which is a small percentage of the overall stock market. This is part of The Big Paradigm Shift, when multiple expansion pushes share prices much higher.
Dan Steffens
Energy Prospectus Group
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