Sunday, August 12, 2018

Re-Look At An Old Financial Times Article Asking Whether The US Shale Revolution Has Peaked? -- August 12, 2018

I had some time so I went back to look at this post: from the Financial Times, October 18, 2017, has the US shale revolution peaked?

To get to this article which is behind a paywall, google ft in charts has us shale peaked. Fortunately, the article is still available. For myself, I have archived the article in case it disappears.

The first graphic in the article tracks rig count, which as readers know, is highly irrelevant when tracking productivity in unconventional oil plays. 

This is the second graphic in the article:

The writer completely misinterpreted the graphic. Something tells me he/she was asking the wrong question, mislead by the sharp decline in "rig productivity" in the Eagle Ford. I may be wrong on this, but I'm starting to get the feeling that a lot of folks are not aware that shale operators "manage their assets" very, very well.

Now that we are aware of how severe the takeaway capacity in the Permian is, and the price differentials, the above graphic makes a lot more sense.


  1. you must have seen that the EIA shows our oil production has slipped by another 100,000 bpd to 10,800,000 bpd last week, after falling 100,000 bpd the prior week...the first time it ticked down, i figured it was a rounding error; when you're rounding to the nearest 100,000 bpd, a 2,000 bpd move can cause a 100,000 bpd change in the reported figure...but two in a row would mean oil production has really fallen...i've been trying to make sense of that, and wondered what you thought had's possible you might have already commented on it, but if so, i missed it....

    1. I had not yet posted that data nor commented on it. I had forgotten to look. Thank you for reminding me.

      My short answer: the drop in US crude oil production probably reflects the reality of takeaway capacity in the Permian, and how operators there are responding. I assume after August 15, 2018, when the NDIC reports monthly production, we may see some stories on production coming out of the various shale plays in the US.

      My long answer at this post:

    2. thanks. i'll also be watching for the next drilling productivity report for national DUCs and completions...completions slipped by 1 in June, the first dip in a long time...

    3. speak of the devil, i see it was released today...nationally, completions were up by 1 to 1276 in July, but June completions were revised to down 6...and duh, i'm quoting a total that includes gas, so breaking out oil will take a bit of computing...

      completion data is in the 'DUC data' excel file attached to the drilling productivity report

    4. Thank you. And completions tell you nothing about how much the oil companies "choked back," and how much oil is stored on site because of takeaway problems, etc., etc. etc.