Permian production decelerates while waiting for pipelines
Published by Lydia Woellwarth,
Editor
World Pipelines,
The Permian basin’s rapid production growth is showing signs of deceleration, according to ESAI Energy’s recent North America Watch. An evaluation of shale producers finds that while Permian basin operating costs in 2Q have fallen approximately 6% on average from this time last year, overall full-cycle breakeven costs are roughly 30% higher, due to increased capital spending. ESAI Energy analyst, Elisabeth Murphy, explains, “Acreage consolidation is key for achieving scale, and will be critical to some producers’ bottom lines, but it comes at a cost. Permian acreage can be expensive”.
With spare takeaway capacity virtually non-existent and breakeven costs rising, ESAI Energy says the number of well completions will continue to slow down, lowering production growth in the basin next year. The rising number of DUCS and the eventual growth in takeaway capacity indicates the potential for an impressive production rebound later in 2019. Even so, ESAI Energy forecasts annual average Permian production growth to slow significantly in 2019, compared to growth of over 800 000 bpd this year.
Read the article online at: https://www.worldpipelines.com/business-news/22082018/permian-production-decelerates-while-waiting-for-pipelines/
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