{"id":2824,"date":"2019-03-31T18:33:51","date_gmt":"2019-03-31T18:33:51","guid":{"rendered":"http:\/\/euromenaenergy.com\/?p=2824"},"modified":"2019-03-31T18:33:51","modified_gmt":"2019-03-31T18:33:51","slug":"shale-suffers-growing-pains-that-could-slow-u-s-oil-production","status":"publish","type":"post","link":"https:\/\/emimer.com\/?p=2824","title":{"rendered":"Shale Suffers Growing Pains That Could Slow U.S. Oil Production"},"content":{"rendered":"<p>The dramatic ramp-up in U.S. shale production is running into a combination of issues &#8212; technical and financial &#8212; that threaten to slow the pace of expansion, according to some of the industry\u2019s biggest companies.<\/p>\n<p>Schlumberger Ltd.\u00a0and\u00a0Halliburton Co., two of the largest providers of oil services, said Monday there will be a\u00a0double-digit drop\u00a0in spending from customers in the U.S. and Canada this year, a gloomier outlook than they had previously given.<\/p>\n<p>American frackers are tightening their belts following a plunge in crude prices in late 2018 and as investors urge drillers to do more with less. An explosive surge in output from shale formations has pushed U.S. oil production past Russia and Saudi Arabia to become the world\u2019s largest. There are warning signs that growth cannot continue indefinitely.<\/p>\n<aside class=\"inline-newsletter\" data-state=\"ready\"><\/aside>\n<p>That\u2019s leading one of those producers,\u00a0Devon Energy Corp.,\u00a0to\u00a0slash\u00a0its workforce by about a third amid pressure on spending, Chief Executive Officer Dave Hager said Monday at the Scotia Howard Weil energy conference in New Orleans. The Oklahoma-based driller has already whittled down its headcount by 200 people this year, he said, and is planning to get its total down to 1,700, from about 2,500 now.<\/p>\n<p>In addition to financial limits, technical difficulties are sparking concern that some oil production forecasts won\u2019t materialize. Schlumberger Chief Executive Officer Paal Kibsgaard became the latest voice in the U.S. energy industry to\u00a0warn\u00a0of the problems caused by \u201cinterference\u201d between newer oil prospects &#8212; called child wells &#8212; and their so-called parent.<\/p>\n<div id=\"desktop-in-article-1-POXMXLSYF01S01\" class=\"page-ad\" tabindex=\"-1\" role=\"presentation\" data-position=\"desktop-in-article\">\n<div class=\"desktop-in-article-ad-dummy\">Too close, and the child wells can turn out to be less prolific than their parent. But too far apart, and drillers can end up leaving oil in the ground.<\/div>\n<\/div>\n<p>\u201cIs there a parent-child relationship? Absolutely. Has it been there since time immemorial? Absolutely,\u201d\u00a0Diamondback Energy Inc.\u00a0CEO Travis Stice said at the conference. \u201cIt\u2019s our responsibility to account for the economics of the degradation between a parent and child well, and it\u2019s our responsibility to dial that into our forecast.\u201d<\/p>\n<p>Stice said Diamondback hasn\u2019t had to cut back its activity in response to those issues, like some of its peers who have had to widen spacing after production failed to live up to expectations.<\/p>\n<p>\u201cI think what you\u2019re seeing is reserve reports coming out at the end of last year with a lot of negative performance revisions in there,\u201d he said. \u201cThat\u2019s really the first tell as an industry that you\u2019ve overcapitalized your assets.\u201d<\/p>\n<p>It\u2019s not just budget constraints or technological challenges that may slow growth.\u00a0Concho Resources Inc.\u00a0President Jack Harper\u00a0said\u00a0the industry will have to throw more money at the Permian Basin\u2019s stretched schools and roads for the hot shale play to handle the level of activity expected over the next several years.<\/p>\n<p>In another sign that the shale boom might be slowing down, explorers have reduced the number of oil rigs operating in the U.S. to the lowest in about a year, a report by Baker Hughes showed on Friday. There\u2019s also a backlog of thousands of wells that have already been drilled but haven\u2019t yet been fracked, the most costly part of the process of bringing a well into producing.<\/p>\n<p>So far, U.S. oil output is holding at a record 12.1 million barrels a day after jumping about 30 percent in just two years. But shale wells have a short life span, with yields sometimes declining in just a few months. More have to be drilled and fracked frequently just to keep up the pace of production.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The dramatic ramp-up in U.S. shale production is running into a combination of issues &#8212; technical and financial &#8212; that threaten to slow the pace of expansion, according to some of the&#8230;<\/p>\n","protected":false},"author":1,"featured_media":2834,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[46,48,57,90,96,107,113,137,139,160,174,183,184,201,202,209,230,232,233,244,246,249,256,267,277,279,288],"class_list":["post-2824","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-aramco","tag-athens","tag-baroudi","tag-democracy","tag-doha","tag-embargo","tag-energy-peace","tag-gas","tag-gazprom","tag-international-maritime-disputes","tag-lebanon","tag-maritime-boundaries-east-mediterranean","tag-maritime-disputes","tag-offshore","tag-oil","tag-opec","tag-poverty-alleviation","tag-putin","tag-qatar","tag-rosneft","tag-roudi","tag-russia","tag-saudi","tag-straddling-hydrocarbons-reserves","tag-total","tag-trump","tag-usa"],"_links":{"self":[{"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/posts\/2824","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2824"}],"version-history":[{"count":0,"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/posts\/2824\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/media\/2834"}],"wp:attachment":[{"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2824"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2824"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2824"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}