Topics in Module 2 Include:
Module 2.1 — Production Basics
Presenter: David Braziel
This module focuses on the drivers of oil and gas production, starting with where things stand today. We discuss the basics of conventional and unconventional production, look at the factors that led us to this stage of the game, then examine how producers behave in different price environments. From there, we get into RBN’s approach to production forecasting, which starts with price scenarios, then models what those scenarios mean for producer investment returns and, finally, how all that gets tied to production.
Module 2.2 — Production Economics Concepts
Presenter: Jeremy Meier
This introduction to production economics explores a typical Haynesville well, focusing on factors like drilling and completion costs, production rates, and commodity prices. It highlights the importance of metrics such as internal rate of return (IRR) and breakeven prices in evaluating the profitability of wells in different basins, or different well tiers within a basin. These benchmarks are pivotal in guiding producers’ drilling activity, reflecting current trends and economic conditions.
Module 2.3 — Lab Model: Production Economics
Presenter: Jeremy Meier
To understand the economics that drive producers’ decision making, we must understand the cost to drill a well and the value returned by the commodities it produces. Continuing the example of the Haynesville well introduced in Module 2.2, the Production Economics Model provides the framework for how RBN analyzes well performance. The model takes inputs such as drilling-and-completion costs, operating expenses, production taxes, royalty rates, type curves, NGL content, and commodity netbacks, and calculates the internal rate of return and breakeven price on an average well. A Permian well example is also considered to demonstrate the impact of associated gas and NGL production on well economics.
Module 2.4 — Other Producer Considerations and the Impacts of Consolidation
Presenter: Jeremy Meier
Oil and gas producers are contending with a number of issues in 2024, including managing their available inventory and optimizing drilled but uncompleted wells as they are turned to sales. This session examines how operator consolidation is reshaping the industry landscape, influencing operational strategies and competitive dynamics. It also analyzes the transformed relationship between rig deployment and commodity prices since the pandemic, offering insights for navigating ever-evolving energy market conditions.
Module 2.5 — Lab Model: Production Forecast
Presenter: David Braziel
In this model, we build a forecast of crude oil and associated gas production using Loving County in the Permian Basin as an example. The forecast consists of three components: historical production, the decline of volumes from existing wells, and expected production from new wells. To build the forecast, initial production (IP) rates and decline curves are used as parameters to determine how future wells will perform over time. The ladder method is then used in conjunction with the well count to determine the total forecast. We walk through several examples to illustrate how changes to input parameters affect the total forecast.
Module 2.6 — Production Forecasts: Oil, Gas, NGLs
Presenter: Jeremy Meier
Building a forecast involves more than compiling production data, it must also make sense within the broader context of the market. This module covers RBN’s current production forecast for crude oil and natural gas in the U.S., including forecasts for basins like the, Anadarko, Bakken, Eagle Ford, Haynesville and Niobrara, which aren’t covered in detail in other presentations at the conference. Factors influencing the short-term forecast through 2024 are discussed, as well as bigger-picture issues that could have longer-term impact as incremental crude and gas growth tries to reach export facilities on the Gulf Coast.
Module 2.7 — Permian Crude: Production, Takeaway Capacity and Pricing
Presenter: Taylor Noland
As the preeminent producing basin in the U.S. and the poster child of the Shale Revolution, the meteoric rise of production from the Permian Basin over the last 10 years has been one of the key drivers of the domestic market. But that growth has not come without some hiccups along the way. This module is a deep dive into Permian oil production and pipeline takeaway capacity, as well as how pipeline constraints have impacted the prices Permian producers receive for their crude oil. It also looks at the more-than-ample takeaway capacity as of recent and expansions of existing Permian crude oil pipelines, what that might mean for Permian prices, and the direction of oil flowing out of the Permian Basin.
Module 2.8 — Permian Gas: Capacity and Pricing Developments
Presenter: Lindsay Schneider
In this module you will get a detailed view of the basin’s natural gas production, pricing and infrastructure. Learn more about how the region’s growing supply and constrained infrastructure are causing the recent run of low and negative cash prices. We’ll discuss the possibilities for infrastructure buildout and what happens next as production grows and increasingly targets Gulf Coast and South Texas LNG demand.
Module 2.9 — Permian NGLs: Production and Capacity
Presenter: Adam Baker
More than 10 Bcf/d of new gas processing capacity is set to come online by the second half of 2026. This module analyzes processing capacity utilization and Permian Y-grade flows out of the basin. It also discusses the competitive dynamics of NGL infrastructure and new pipeline expansions and projects designed to increase takeaway capacity. This section is an overview of Permian NGLs — the pieces that make up the market driving Gulf Coast fractionation and NGL exports.
