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When crude oil prices crashed in the second half of 2014 and 2015, producers survived by becoming leaner and more efficient. That transition included drastic reductions in the rates paid to services companies while wringing ever more oil and gas out of each well and, in the process, permanently altering the economics of drilling and completion. This year, producers are again facing a lower-price environment; since early October (2018), crude prices have dropped more than 30%. In the current, more conservative investment environment, can producers do it again? Can additional value be squeezed out with bigger well pads and longer laterals? Today, we continue a series exploring the benefits and risks of these highly concentrated and highly complicated operations. 

Dominator. Showboat. Brass Monkey. These are not player names in the re-established XFL; these are project names given to colossally proportioned drilling pads in the Permian and Appalachia. A single one of these well pads can be home to 20, 30, even 60 or more permitted well spots, each with miles-long laterals branching out in multiple directions. In today’s blog, we begin a series exploring the motivations that sparked this trend to larger pads and discuss the impact they’re having on the upstream and midstream sectors. 

The latest Energy Information Administration (EIA) April 2013 short term energy outlook forecasts US crude oil production to increase from an average of 6.5 MMb/d in 2012 to 7.9 MMb/d in 2014. Surging crude production needs to find routes to market – and often competes for pipeline space with growing Canadian imports. New crude pipelines are taking too long to build. At the same time many natural gas pipelines are flowing far beneath capacity because new gas production nearer to market makes them redundant. Converting these natural gas pipelines to crude oil use where geography allows is a potential win-win. Today we look at gas to crude pipeline conversion economics.

NYMEX WTI crude traded at over $100/Bbl for most of March through May this year. With today’s close at $79.21/Bbl, the price is down 28 percent from this year’s highs. Canadian heavy crude bitumen postings fell to $64/Bbl last week. Could a press release from a small Canadian oil exploration company last week be the first indication of investor concern? In today’s blog, we ask whether Canadian Oil Sands production costs are too high to justify new investment.