Revolutionary U.S. Shale Shakes Up Oil Markets in 2023

by | Jul 23, 2023 | Shale, Energy Independence, News, OilPrice.com, United States

U.S. shale shakes up the global energy market and is reshaping industry growth with most impressive growth stories in history.

U.S. Shale Shakes Up OPEC With Record Production In 2023

As an oil drilling operator, we are proud to announce that the United States has taken a bold stance against OPEC by achieving record-breaking oil production in 2023. According to the Energy Information Administration (EIA), our total output is forecasted to reach an impressive 12.61 million barrels per day (bbl/day) this year, surpassing the previous record of 12.32 million bbl/day set in 2019. This substantial increase in production has left energy experts who were bearish about U.S. crude supply questioning their assumptions that we have already reached our peak.

Overcoming Challenges: Rising Costs, Limited Supplies, and Labor Issues

Despite facing challenges such as rising costs, limited labor, and equipment supplies, the U.S. shale industry has defied expectations and successfully ramped up output. The significance of our achievement becomes evident when considering the efforts made by OPEC to keep supplies low and boost prices. Rystad Energy estimates that while OPEC and its allies announced production cuts equivalent to around 6% of the 2022 levels, non-OPEC supply, with the U.S. leading the way, accounted for two-thirds of those cuts.

It is important to note that this remarkable growth comes at a time when energy experts believed that U.S. shale growth was slowing down due to the high breakeven costs of domestic producers. However, we have demonstrated improved efficiency and cost-effectiveness in our operations. J.P. Morgan reports that U.S. drilling and fracking costs have declined by 36% since 2014, significantly reducing the breakeven points for many producers. For example, companies like EOG Resources can now generate profits from oil priced as low as $42 per barrel, equivalent to the profitability of $86 per barrel oil in 2014. In contrast, Saudi Arabia requires approximately $81 per barrel oil to balance its books.

Impact of U.S. Petroleum Production Without Shale Revolution

The U.S. shale revolution has not only reshaped the global energy markets but has also become one of the most impressive growth stories in recent history. Starting in 2008, the U.S. shale boom rapidly propelled the Permian Basin to surpass Saudi Arabia’s Ghawar as the world’s highest producing oilfield in just over a decade. Reuters estimates that U.S. petroleum production is now 10-11 million bbl/day higher than it would have been without horizontal drilling and hydraulic fracturing.

Despite our accomplishments, we have encountered some recent difficulties in further increasing production. Pressure from investors to improve returns, limited equipment and labor availability, as well as a lack of capital, have posed challenges for the U.S. shale industry. However, we are confident that these obstacles can be overcome. Companies like ExxonMobil are investing in innovative fracking technologies that can potentially double crude output from existing wells. By fracking more precisely along the wellbore and keeping the fracked cracks open longer, the flow of oil can be significantly boosted.

Refracturing: Unlocking the Potential of Existing Wells

Additionally, we have discovered a proven technique called shale well refracturing that allows us to increase output from existing wells at a fraction of the cost of drilling new ones. Refracturing involves restimulating a well after its initial production, resulting in near-original or even higher rates of production. This approach not only extends the productive life of a well but also provides a quick increase in output. Recent research from the Eagle Ford Shale in Texas has shown that refractured wells using liners can outperform new wells with more modern completion designs.

Refracturing has gained popularity as drilling technology improves and aging oilfields experience declining output. According to estimates, North Dakota’s Bakken Shale alone has around 400 openhole wells capable of generating over $2 billion if refractured. The cost-effectiveness of refracs is noteworthy, as they can be up to 40% cheaper than drilling new wells and can double or even triple oil flows from aging wells.

Furthermore, refracturing operations do not require additional permits or negotiations with landowners, making them less disruptive to the environment. Considering the current inflationary environment and rising costs in the industry, refracs present an attractive opportunity for operators to optimize production. The technique has also demonstrated higher recovery rates compared to new wells with modern completion designs.

Conclusion:

In conclusion, as an oil drilling operator, we are proud to be part of the U.S. shale industry’s incredible achievements in 2023. Our record-breaking production levels have challenged OPEC’s control over oil markets and provided a reliable source of supply, keeping oil prices low. Despite facing challenges, we continue to improve efficiency, reduce costs, and explore innovative techniques such as refracturing to maximize output and extend the lifespan of our wells. The U.S. shale revolution is far from over, and we are excited to contribute to its ongoing success.

Commentary from Greg:

What’s this all about?

Many high net worth investors nowadays are concerned with their investments because of all the volatility in the markets, uncertainty of economic growth, potential looming recession, ever increasing tax burdens. (Keep reading… there are SOLUTIONS!)

What I do (the solutions)

My value to you is that I help enable you to ride the coattails of the big boys (Marathon, EOC, Continental, etc…) & drill wells directly with these major oil companies

This is something that the big boys would never allow you to do on your own. They don’t need or want partners, but we are bridging the gap between them and you.

This allows us to take advantage of their huge expertise in the wells they are drilling, to help create a strong monthly cash flow, potential lucrative tax benefits. and peace of mind knowing you own a hard asset that isn’t going anywhere.

Is this something you've experienced, too?

Let’s talk more about the recent developments with U.S. shale and how they can help solve some struggles that you’ve encountered as a high net-worth investor.

What is Shale?

Shale energy is both natural gas and oil produced from shale, a fine-grained sedimentary rock found in at least 22 onshore shale basins in more than 20 states across the U.S. Shale deposits have long been known to contain large quantities of oil and natural gas, but the resources were not economically recoverable until recently.

Shale 101

What are the benefits of shale?

Shale oil is similar to petroleum, and can be refined into many different substances, including diesel fuel, gasoline, and liquid petroleum gas (LPG). Companies can also refine shale oil to produce other commercial products, such as ammonia and sulfur. The spent rock can be used in cement.

Oil Shale – National Geographic

Why doesn't the U.S. use shale oil?

The major reason that U.S. shale companies are reluctant to boost production at all costs is that they need to keep shareholders happy first and foremost. Other issues include cost inflation and the shrinking number of sweet spots for them to tap.

OilPrice.com

Sources:

Kimani, A. (2023, July 12).U.S. Shale Challenges OPEC With Record Production In 2023. OilPrice.com. https://oilprice.com/Energy/Crude-Oil/US-Shale-Challenges-OPEC-With-Record-Production-In-2023.html

In-text citation: (ChatGPT, 2023) Reference list: ChatGPT. (2023, July 17).

Why Qualified Investors Choose Experienced Operators

Get access to your Investment Guide today to learn more about direct participation in oil and gas exploration.

You have Successfully Subscribed!