The Ascent of Shale

This model contains our live, basin-by-basin shale forecasts. It covers the Permian, Bakken and Eagle Ford, as a function of the rig count, drilling productivity, completion rates, well productivity and type curves. Thus, we derive production and financial expectations.

For 2020, we model the impacts of a price collapse to $30/bbl. In this scenario, c270 rigs are shed YoY in 2H20, to keep the core shale basins running within cash flow. This slows supply growth from +1.2Mbpd YoY in 2019 to +0.4Mbpd 2020 and sets the stage for a -0.5Mbpd decline in 2021.

Our longer-term numbers hinge on the productivity gains described in our thematic research. Shale productivity trebled from 2012-2018. We think it can effectively double again by 2025. This would unleash c20Mbpd of US liquids production by 2025, within cash flow at a flat $50/bbl Brent input.