Drilling activity is up 16% in 2018. What’s the outlook for 2019 and beyond?
Despite a $25 slide of the WTI oil price since early October, US unconventional shale players are showing no sign of reducing drilling programs in the short term. In a $60 WTI oil price scenario growth will continue in 2019, estimated at 8%, according to Westwood’s new U.S. Drilling and Completion Q4 2018 Outlook. If WTI remains near the current level of $50/bbl, however, then this could stall future growth.
US Land Rig Projection 2014-2022. Historic rig counts are from GE Baker Hughes rig count data. Then WGE forecasts future rig counts using the ratio of wells drilled per rig and the expected future drilling activity. WGE analysis assumes a WTI ranging from $67 to $70 for 2020-2022 period.
Source: WGE Analysis, GE Baker Hughes Rig Count Data
Year to date US active land rig count is up 14%, signaling while strong correlation still remains between rig count and drilling activity (+16%), the gap will continue to widen as the improvement in rig efficiency and factory drilling techniques allow for higher wells drilled per rig ratio. The improvements in drilling efficiency will also mean the growth rate for the rig count will be less than half the growth rate for completions.
The report builds on a well-by-well historic platform to analyze the latest drilling & completion trends in key metrics such as proppant per completion, average lateral lengths, permits issued, pad size, permit-to-completion cycle time on a basin-by-basin level. Furthermore, the report provides future activities for drilling and completion, drilled-but-uncompleted (DUC) counts as well as rig counts.
The eight regions covered in this report (Permian, DJ-Niobrara, Eagle Ford, Haynesville, MidCon, Williston, Appalachia and Powder River) have seen a significant uplift in activity following oil prices rallying in early 2018.
New in this report: Due to rising interest, Westwood included the Powder River as an eighth basin in this report.
The eight regions covered in this report (DJ-Niobrara, Eagle Ford, Haynesville, MidCon, Permian, Appalachia, Williston, and Powder River) have seen a significant uplift in activity following oil prices rallying in early 2018. Based on an expectation of rising consensus commodity prices through to 2022, Westwood expects the US market to enter a period of sustained growth in both activity and expenditure.
Examining the key US unconventional basins and drawing from extensive data and expertise from Westwood’s, Energent Group, the US Drilling & Completion Market Forecast is an invaluable guide to the future prospects for one of the hottest areas of global activity at present. Covering expectations both over the near-term on a quarterly basis (out to Q4 2020) and the long-term on an annual basis (out to 2022), the report builds on a well-by-well historic platform to analyse the latest drilling & completion trends in key drivers such as measured depth, lateral lengths, stage counts and drilling days on a granular level.
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