RE: Oil Price22 Apr 2020 14:51
... the bigger problem for the shale industry is the lack of new wells being drilled. Shale wells decline by more than 60% in the first year, meaning new ones are needed to replaced production from old ones.
With few new wells coming online, IHS sees U.S. oil production declining to 10.1 million barrels a day by the end of the year, from 12.8 million barrels a day at the start. That will likely drop further to somewhere around 8.5 million barrels a day in 2021 to 2022, according to Noah Barrett, a Denver-based energy analyst at Janus Henderson.
“A good portion of production, particularly areas of the Bakken and Oklahoma, will go away completely,” said Barrett, whose employer manages $356 billion. “Fresh capital will be needed to grow off that lower base. But there’s zero appetite for that in the foreseeable future.”