{"id":4489,"date":"2019-11-09T17:33:14","date_gmt":"2019-11-09T17:33:14","guid":{"rendered":"http:\/\/euromenaenergy.com\/?p=4489"},"modified":"2019-11-09T17:33:14","modified_gmt":"2019-11-09T17:33:14","slug":"shale-oil-pioneers-say-the-boom-times-are-over","status":"publish","type":"post","link":"https:\/\/emimer.com\/?p=4489","title":{"rendered":"Shale Oil Pioneers Say the Boom Times Are Over"},"content":{"rendered":"

The days of\u00a0relentless\u00a0production growth from U.S. shale oil fields are ending, potentially aiding OPEC\u2019s years-long effort to drain a worldwide supply glut, according to industry pioneers Scott Sheffield and Mark Papa.<\/p>\n

Investor calls for shale producers to shut down rigs and stop burning through cash are being heeded, Sheffield,\u00a0Pioneer Natural Resources Co.\u2019s chief executive officer, said on Tuesday. Across the American shale industry, output growth will slow next year, providing a boost for crude prices through the early 2020s, he said.<\/p>\n

\u201cI don\u2019t think OPEC has to worry that much more about U.S. shale growth long term,\u201d Sheffield said during a conference call with analysts. He\u2019s \u201cdefinitely becoming more optimistic that we\u2019re probably at the bottom end of the cycle regarding oil prices.\u201d<\/p>\n

Talk of a shale slowdown reached a\u00a0fever pitch\u00a0this year as investors crushed drillers\u2019 stocks and demanded spending discipline. As if on cue,\u00a0Occidental Petroleum Corp.,\u00a0Apache Corp., Cimarex Energy Co. and Pioneer are all signaling plans to trim budgets. Explorers\u2019 capital spending in 2020 will be 17% lower than this year, according to Cowen & Co., citing guidance from 14 third-quarter earnings reports.<\/p>\n

Mark Papa, who built Enron Corp. castoff\u00a0EOG Resources Inc.\u00a0into one of the world\u2019s biggest independent oil explorers and now runs\u00a0Centennial Resource Development Inc., has been\u00a0sounding the alarm\u00a0on shale growth since at least February. In reiterating that warning on Tuesday, he said the slowdown will be more dramatic than he predicted as recently as nine weeks ago.<\/p>\n

Beyond 2020<\/h3>\n

Papa downgraded his 2020 shale growth forecast to 400,000 barrels a day compared from the 700,000 estimate he discussed in early September.<\/p>\n

\n
\u201cThis is likely not just a 2020 event,\u201d Papa said during Centennial\u2019s third-quarter results call. \u201cI believe U.S. shale production on a year-over-year growth basis will be considerably less powerful in 2021 and later years than most people currently expect.\u201d<\/div>\n<\/div>\n

Sheffield sees about 700,000 barrels a day being added next year while the Energy Information Administration\u00a0predicts\u00a0that next year\u2019s daily production will expand by 910,000 barrels. Even that would be half of last year\u2019s increase.<\/p>\n

Crowded Wells<\/h3>\n

For Papa, there\u2019s a more fundamental reason driving the downturn in shale than investor sentiment. Many producers have drilled their best locations and are now turning to lower-quality sites. Some also have been drilling wells too close together, resulting in a loss of overall performance.<\/p>\n

The counterpoint to Sheffield and Papa\u2019s gloomy outlook is the supermajors\u00a0Exxon Mobil Corp.\u00a0and\u00a0Chevron Corp., which are ramping up Permian Basin drilling. Each plan to produce about one million barrels a day from the basin by the early 2020s. That may provide a silver lining for independent producers: an opportunity to get bought, Sheffield said.<\/p>\n

The majors will have \u201cto decide whether or not to bulk up their inventory over the next two to three years and decide whether or not to acquire any independents,\u201d he said.<\/p>\n

\u2014 With assistance by Catherine Ngai<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The days of\u00a0relentless\u00a0production growth from U.S. shale oil fields are ending, potentially aiding OPEC\u2019s years-long effort to drain a worldwide supply glut, according to industry pioneers Scott Sheffield and Mark Papa. Investor…<\/p>\n","protected":false},"author":1,"featured_media":4490,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[46,48,57,68,76,77,82,86,87,90,96,99,103,107,109,111,113,137,139,146,148,160,174,183,184,201,202,209,222,230,232,233,244,246,249,256,262,263,267,277,279,280,285,288,295],"class_list":["post-4489","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","tag-aramco","tag-athens","tag-baroudi","tag-carbon","tag-climate","tag-climate-change","tag-co2","tag-cyprus","tag-decarbonising","tag-democracy","tag-doha","tag-eastmed","tag-egypt","tag-embargo","tag-emissions","tag-energy","tag-energy-peace","tag-gas","tag-gazprom","tag-greece","tag-greenenergy","tag-international-maritime-disputes","tag-lebanon","tag-maritime-boundaries-east-mediterranean","tag-maritime-disputes","tag-offshore","tag-oil","tag-opec","tag-pollution","tag-poverty-alleviation","tag-putin","tag-qatar","tag-rosneft","tag-roudi","tag-russia","tag-saudi","tag-solar","tag-solar-power","tag-straddling-hydrocarbons-reserves","tag-total","tag-trump","tag-turkey","tag-unclos","tag-usa","tag-x"],"_links":{"self":[{"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/posts\/4489","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=4489"}],"version-history":[{"count":0,"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/posts\/4489\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/media\/4490"}],"wp:attachment":[{"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4489"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4489"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4489"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}