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US shale companies on track for spectacular production growth in 2019

Publication Date: 31 May 2019 - By Gaurav Sharma (Associate Editor ReachX) By Gaurav Sharma (Associate Editor ReachX)
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Equity Fundamental Macro Equity Commodity USA Energy

Fresh industry research suggests US shale operators are on course to increase crude oil production significantly in 2019. 

According to Rystad Energy, the growth in American onshore production from the first quarter through the fourth quarter could come in the range of 1.1 to 1.2 million barrels per day (bpd); a projected growth of 16% on an annualised basis.

The Oslo, Norway-headquartered research and consulting outfit notes that after a poor first quarter, depressed by weather effects, shale companies have, over the past weeks, assured investors that they will achieve previously communicated production targets, as well as demonstrate excellent capital discipline and cost control.

For purposes of research, Rystad Energy analyzed the first quarter results of around 50 US shale operators to draw its conclusions. 

“Despite temporary challenges faced in the beginning of the year, E&P companies are set to deliver on their original production and capital targets, with some being well positioned to perform above initial expectations. Several operators have in fact raised their production guidance for the remainder of the year,” Veronika Akulinitseva, senior analyst at Rystad Energy said. 

“The slow first quarter (of just 0.1% growth) implies an even steeper expected growth curve for the remainder of the year. In fact, acceleration of oil production for many operators is already underway and oil additions are thus likely to increase notably already in the second quarter of 2019.” 

Rystad Energy said Canadian operator Enerplus was the player that raised its oil guidance the most, expecting 10% higher volumes than originally guided. It said growth is already underway and the company is aiming to generate a double-digit rise in production already in the second quarter. 

Likewise, SRC Energy, an independent operator in the Denver-Julesburg basin, raised its oil target by 7%, attributing the adjustment to overly conservative original guiding.

 

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