FIRESIDE CHAT TOPIC: 2021 Outlook for the U.S. Shale Oil and Gas Market
DETAILS: A leading analyst of the U.S. upstream oil and gas industry reviews the wild ride that the market took in 2020 and into 2021, with prices plunging, drilling activity falling with it and then a late-year revival that took a lot of people by surprise. Companies are drilling again, but will it last?
SPEAKER and INTERVIEWER: Benjamin Shattuck is the research director for the Americas region at Wood McKenzie, a leading energy analysis firm. He is interviewed by Kevin Hill, executive publisher at FreightWaves.
“Tight oil is in a pivotal movement. It’s shifted from a new and exciting technology and not even fully understood and maturing to a place where we understand the impact that shale has on price cycles.”
“At the same time, investors are changing what they’re asking for from these companies and reevaluating whether these companies are investable in the future. In the last decade, the targets have shifted.”
“Tight oil historically has drilled through the downturns because there was so much excess capital. That’s not the case today.”
“You’re seeing consolidation and streamlining. Head counts are going down. The cost side of the equation is being examined closely. When we emerge from this, we will have fewer producers who will be more streamlined, so at a given price, they can generate a higher return or produce more oil.”