Apprehension over a resurgent rig count and consequent rebounding oil supply is starting to look vindicated, according to Platts RigData’s RADAR Report. Despite Saudi Arabia’s yeoman efforts to rein production, burgeoning crude stocks have markets nervous, and oil prices of late are at their lowest point since November. With good reason, contends the Platts RigData News & Analysis team, who claim: Never underestimate the resilience and dogged persistence and innovation of the American producer. Even the worst downturn in a generation has scarcely dented the inexorable rise of US production.
The above chart shows how profoundly the game has changed for US oil production in this century with the dominance of horizontal drilling (up tenfold in terms of footage) and multistage fracturing in unconventional plays. After ballooning by almost 70% in 5 years, US oil output slipped by 6% YOY last year but has already rebounded by almost 3% so far this year. The current issue of the RADAR Report spotlights a typical large independent producer’s aggressive production growth strategy for 2017 that is being replicated in many boardrooms this year.
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