US Shale Firms Go Back To Work Buoyed By OPEC Deal, Trump Victory
HOUSTON, Nov 14 (Reuters) - U.S. shale producers are redeploying cash, rigs and workers, cautiously confident the energy sector has turned a corner after Donald Trump's election victory and OPEC's recent signal that it plans to curb production.
The downturn produced a leaner, more efficient U.S. shale industry that was forced to develop and quickly adapt new technology to compete with conventional oil supplies during a two-year period of depressed prices.
"You're starting to see a little bit of light at the end of the tunnel," Ryan Lance, chief executive of ConocoPhillips , the largest independent U.S. oil producer, said in an interview last week. "We're beginning to put capital back to work, but we're being cautious."
Specifics of the deal by the Organization of the Petroleum Exporting Countries - especially what it means for each member - need to be finalized at a meeting later this month in Austria. But the tentative agreement indicated OPEC kingpin Saudi Arabia is keen to end a damaging two-year oil price war. That prodded U.S. producers to action.
The U.S. oil drilling rig count has grown 6 percent since OPEC's September accord, according to oilfield analytics firm NavPort, with additions across the country's top shale fields including the Permian (7 percent) and the Bakken (17 percent).
Also, Trump's victory is expected to bring to the White House an advocate for oil and gas drilling, who will slash regulations and encourage new energy industry development.
Occidental Petroleum Corp, Chevron Corp, Pioneer Natural Resources Co and ConocoPhillips are among those adding rigs or preparing to do so.
Oasis Petroleum Inc, a major North Dakota producer, bought 55,000 acres last month from SM Energy Co for $785 million, a bullish bet on the future of oil prices. The company also plans to add rigs.
"This all reflects more of a confidence around our business plan in a lower oil price environment," Oasis Chief Executive Tommy Nusz said in an interview last week.
"We feel like we can hold our own now in a $40 (per barrel oil) world and grow in a $45 to $50 world."
Citing its technology and other improvements, EOG Resources Inc raised its growth projections and now expects to boost output 15 to 25 percent each year through the end of the decade if oil prices stabilize near $50 per barrel.
"After two years of this down cycle, we are more than ready to resume higher-return oil growth," EOG CEO Bill Thomas told investors in early November.
All that activity will have an effect once things ramp up.
U.S. unconventional shale oil production is expected to dip 13 percent this year from 2015 levels and continue to slip into 2017 before rebounding 11 percent in 2018, according to data from the U.S. Energy Information Administration.
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Operates 14 Offshore Rigs
- BP Is Said in Talks for Conoco's UK Field Stake in Swap (May 18)
- US: Enough Global Oil To Avoid Caribbean Fuel Disruptions (May 16)
- Sources: Conoco Aiming To Seize Oil Cargoes Near Citgo's Aruba Terminal (May 15)
Company: Anadarko Petroleum more info
- Oil, Gas Leaders Warn Trump He Risks Harming Their Industry (Mar 16)
- Shale Producers Urge FERC To Deny White Cliffs Oil Pipeline's Fee Request (Feb 23)
- Mozambique Approves Anadarko's $20 Billion Natural Gas Plan (Feb 07)
Company: Pioneer Natural Resources more info
- Permian's Mammoth Cubes Herald Supersized Future for Shale (Feb 22)
- Big Shale Turns OPEC Ally From Foe With Focus on Oil Returns (Dec 04)
- Pioneer Natural 3Q Adjusted Profit Beats Expectations (Nov 01)
Company: Chevron Corporation more info
- Chevron Unveils Shared Vision for North West Shelf Infrastructure Stimulus (May 16)
- An Upstream Comeback with Less Splash but More Cash? (May 11)
- Big Oil Investors Show They Want More Than Just Profit (May 01)
Company: Occidental Petroleum more info
Operates 2 Offshore Rigs
- Ex-Occidental Chief in $2.66B Deal for EnerVest Shale (Mar 20)
- What Women Really Want on the Job? Ask Big Oil's Only Female CEO (Feb 23)
- Media: Cleanup Underway After Centurion Pipeline Oil Spill In Oklahoma (Feb 19)