A Survivor’s Guide to Oilfield Volatility — OFS Edition
So, what really happened last year? Our title really begs the question: Why do we need a survivor’s guide to 2020 if it’s over? It is important to review last year and analyze how we can adjust moving forward. We want to demonstrate that last year was tumultuous and we are still experiencing its consequences. […]
Is Price Creep Coming for Oilfield Services?
Are we seeing the first little clawbacks of price creep back in drilling and completing new wells? We don’t have a lot of evidence yet, but a few signs of increasing prices for oilfield services (OFS) are appearing on the horizon. For example, Devon Energy said that per unit expenses are up by ~5% in […]
Past Is Not Prologue: Changes Coming to U.S. Primary Energy Demand
The U.S. leads the world for per capita consumption of primary energy harvested directly from natural resources (Figure 1). While oil, solar and hydro are examples of primary fuels, electricity isn’t. Rather, different types of primary energy are transformed into power that turns on lights at the flick of a switch. The maturing of the […]
Oil Rally Roils Producer-Consumer Relations
Economic logic dictates that lowest-cost oil producers will survive longest once oil demand peaks, plateaus and starts to decline. In a shrinking market, OPEC low-cost oil producers, mostly operated by state-held national oil companies, should be able to maintain their market share and even expand it as higher-cost competitors falter. But if the volume outlook […]
Oil Sands Fuel Higher Gas Demand in Alberta
An underrated part of the Alberta gas story has been the steady increase in provincial gas demand over the past decade. Daily demand in the province reached an all-time high in February of 7.69 Bcf/d, passing the previous record of 7.52 Bcf/d set in January 2020 (Figure 1). While last month’s weather was undoubtedly frigid […]
Permian Well Cost Trends – Reflation and Innovation, Divergence and Convergence
Wells costs in the Permian dropped in recent years as operators applied lessons learned to improve capital efficiency. In response to the plummeting commodity prices in mid-2020, activity across all shale plays hit the brakes, resulting in a substantial decline in service costs. This demand-driven service cost deflation occurred concurrently with continued operational innovation in […]
PetroLogic Podcast
Listen in to Judith Dwarkin, Bill Farren-Price and Morgan Kwan summarize key insights from the February 2021 edition of PetroLogic.
U.S. Oil – Foot Off the Gas
Onshore U.S. drilling activity cratered in summer 2020 as the number of active horizontal rigs dropped 70% from pre-pandemic levels to ~200 rigs. Given Saudi Arabia’s unexpected cut earlier this year of 1 Mbbl/d of oil and pent-up economic activity signaling increased liquids demand for 2H21 and 2022, we are cautiously optimistic that prices can […]
The Texas Cold Snap — Where Do We Go from Here?
Texas’ energy infrastructure, despite being warned after the 2011 freeze about the critical vulnerability of our fuel supplies and power supply system, found itself frozen from a cold weather event that no one thought likely … or even possible. Our natural gas producing infrastructure was not weatherized. Our power plant and transmission infrastructure were not […]
Guyana-Suriname’s Recent Duds Take Little Shine Off World’s Hottest Offshore Play
The Guyana-Suriname Basin (GSB) is the most prolific exploration basin today with more than 10 billion boe of recoverable resource discovered since 2015, similar to the combined discoveries of all other major offshore basins in Brazil, Mexico, Gulf of Mexico, the U.K. and Norway over that same period. Though the amount of new-field wildcat (NFW) […]