Comprehensive Energy Data Intelligence

Information About Energy Companies, Their Assets, Market Deals, Industry Documents and More...

The growth of the U.S. oil and gas industry in 2022 will come from smaller companies and private businesses

The U.S. is expected to see an increase in oil production thanks to little-known private companies that are unaffected by stock market pressures. By 2022, oil output is expected to grow by 800,000 bbl/d, increasing sharply from this year and making the U.S. the fastest-growing oil producer outside of the OPEC cartel.

Surprisingly, the rise is not being driven by major oil companies. More than half of total U.S. output growth next year will come from privately-held producers, versus regularly expected 20%.

Currently, oil prices are hovering around $70/bbl, which makes most shale wells profitable to drill. Yet, despite huge losses resulting from the pandemic as well as unsustainable drilling rampage, the majority of leading oil companies have promised their shareholders to limit the amount they spend on growth for now. In contrast, private companies decided to bite the bullet, and have been leading the rise in oil and gas rigs drilling in the U.S. this year, which has more than doubled over from past September.

The onset of the Coronavirus pandemic of late 2019 dethroned the American oil industry from the leading position — which it got thanks to active shale field development — by forcing States to slow production from a peak of about 13 million barrels/day in late 2019 to about 11.1 million barrels/day by the end of 2020 due to low oil prices and falling demand.

Nevertheless, increasing crude oil production is now on the government agenda after the impact of Hurricane Ida, and expects production to reach 12.2 million barrels/day by the end of 2022. It is projected that drilling and bringing new oil wells online will grow more than $15 billion in one year.

In times of tight oil supplies, U.S. growth will impact world oil market balances. Currently, OPEC+ nations alone have been bringing about 400,000 bbl/d of new production volumes to the market each month in response to the unprecedented cuts last year.

Bank of America also expects to see new supplies from the United States of about 800,000 barrels per day in 2022 in a bid to ease supply concerns. And even with a strong comeback from the U.S., crude prices should still hold well above $70/bbl next year and could, potentially, even jump as high as $100/bbl.

Despite these prospects, many leading oil companies still decided to bow down to their shareholders, putting profits overproduction increases.

Although the oil and gas sector has been on a decline for the past couple of years, changes in the public’s perception of the industry might not be too far away. A recent rise in oil prices is being accompanied by a continued level of capital discipline from producers, which could lead to a healthier reputation for the sector.

At Rextag we also expect to see some fairly major shifts in perception, in line with the way other sectors dealt with shifts in business models.

Back

There is a new guy on the block: Penn Virginia rebrands to Ranger Oil

Penn Virginia announced a rebranding to Ranger Oil on 6 Oct. following the close of the Lonestar acquisition. This Texas oil & gas giant reinvents itself anew, shifting its energy development in the lone star state towards safer and more efficient oil and gas operations. The company's consolidated assets now amount to over 140,000 net acres strategically positioned in the Eagle Ford play of south Texas, making it one of the biggest players. It is anticipated that the full rebranding will be complete by the year-end of 2021. For the full rundown of the situation visit our blog.

Each year a substantial growth in volume can be observed in both gas processing and NGL production.

Oil output in the Permian Basin in Texas and New Mexico is supposed to go up 88,000 bbl/d to a record 5.219 million bbl/d in June, as the U.S. Energy Information Administration (EIA) announced in its report on May 16. Additionally, gas productivity in the Permian Basin and the Haynesville in Texas, Louisiana and Arkansas will rise to record highs of 20 Bcf/d and 15.1 Bcf/d in June, respectively. Given that this growth has been expected, recent global market changes make forecasting the output even more challenging. Learning how production will change is easier with early activity tracking, a new service recently launched by Rextag – Pad Activity Monitor. With the help of PAM, you are able to monitor well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days. Additionally, it cuts down activity reporting lag times by at least 98%, from 120-180 days down to just 5-8 days. In order to access reports, charts, tables, and mapping visualizations via Rextag’s Energy DataLink use a web-based application allowing users to filter, download and identify activity on a map or data table. Moreover, customers will be able to set up daily, weekly, and monthly email report notifications.

The EIA forecasts that total output in the main U.S. shale oil basins will increase 142,000 bbl/d to 8.761 million bbl/d in June, the most since March 2020. Oil productivity in the Permian Basin in Texas and New Mexico is supposed to go up 88,000 bbl/d to a record 5.219 million bbl/d in June, as the U.S. Energy Information Administration (EIA) announced in its report on May 16. In the largest shale gas basin, the productivity in Appalachia in Pennsylvania, Ohio and West Virginia will grow up to 35.7 Bcf/d in June, its highest since beating a record 36 Bcf/d in December 2021. Gas output in the Permian Basin and the Haynesville in Texas, Louisiana and Arkansas will rise to record highs of 20 Bcf/d and 15.1 Bcf/d in June, respectively. Speaking of the Permian future output, putting hands on upcoming changes in production has recently been made easier with the new Rextag's service - Pad Activity Monitor. Thanks to satellite imagery and artificial intelligence, customers are able to monitor the oil and gas wells and are provided with near real-time activity reports related to drilling operations. However, it is noticed that productivity in the largest oil and gas basins has decreased every month since setting records of new oil well production per rig of 1,544 bbl/d in December 2020 in the Permian Basin, and new gas well production per rig of 33.3 MMcf/d in March 2021 in Appalachia.

No sooner had the crude prices soared above $100/bbl than the industry professionals believed in an incredible growth of drilling activity in North America’s largest shale patch. Analysts speculate that additional output of 500,000 barrels of oil daily would become a significant part (4%) of overall U.S. daily production. That is going to flatter oil and gasoline prices. Drilling permits in the Permian Basin are persistently growing, averaging approximately 210 at the beginning of April. Moreover, the permits trend is noticed as an all-time high as a total of 904 horizontal drilling permits were awarded last month. Nowadays, learning and analysing the current situation and predicting the future development become easier with early activity tracking, a new service recently launched by Rextag. Rextag's Pad Activity monitor (PAM) allows you to see well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days with the help of satellite imagery and artificial intelligence. While the increase in drilling will result in higher production, U.S. shale producers will have to overcome several hurdles including labor shortages and supply constraints.

2022 blog posts