Most U.S. onshore operators will restore nearly all shut in oil volumes by the end of the third quarter of this year, according to a Rystad Energy analysis of 25 public oil operators’ second quarter earnings statements.
Curtailments from the sample group peaked in May with a net 772,500 barrels per day (bpd) taken off the market before decreasing to a net 680,300 bpd in June, Rystad Energy outlined. In July, around 306,500 bpd in net volumes remained curtailed, according to Rystad Energy, which noted that this number is expected to fall to a net 74,300 bpd in August and that “nearly all” production is set to be reactivated by September.
Rystad Energy highlighted that the cuts monitored in the sample group were implemented mostly in April and May and were entirely driven by economic and technical considerations, with operators shutting in lower margin wells while reducing flowback on others. The company said a recovery in oil prices in the second half of May and a stronger overall market outlook prompted many producers to re-evaluate their shut-in plans.
“No loss of production has been reported by any operator following the shut-ins and moderation of output, with most companies flagging a smooth return of operations, and in some cases posting a positive production impact from those reactivations,” Rystad Energy Vice President for North American Shale and Upstream, Veronika Akulinitseva, said in a company statement sent to Rigzone.
Rystad Energy’s sample group of 25 companies included the following oil and gas businesses; ConocoPhillips Corporation, ExxonMobil Corporation, Chevron Corporation, Occidental Petroleum Corporation, Concho Resources Inc, Apache Corporation, Continental Resources Inc and EOG Resources Inc.
Rystad Energy is an independent energy research and business intelligence company, according to its website. The company is headquartered in Oslo, Norway, but has offices all around the globe.
To contact the author, email andreas.exarheas@rigzone.com
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