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Oil Industry Spending May Soon Rebound

Dock

Friday January 5, 2018

In the latest edition of the Numbers Report, we’ll take a look at some of the most interesting figures put out this week in the energy sector. Each week we’ll dig into some data and provide a bit of explanation on what drives the numbers.

Let’s take a look.

1. Capex slightly bottoming out

(Click to enlarge)

- Upstream capital and exploration expenditures among E&Ps is nearing a rebound, but the increase from 2016 lows are a drop in the bucket compared to how far spending has fallen from 2014 levels.

- Spending hit $900 billion in 2014, but had plunged by nearly half two years later. Rystad energy predicts that spending will bottom out this year at $510 billion, essentially flat since 2016 when spending dropped to $512 billion.

- North American spending saw the sharpest decline, but also saw a rebound in 2017 by 18 percent.

- North America will also see the largest growth going forward at 8 percent CAGR through 2025.

- The steep spending declines has translated to the lowest volume of new oil discovered in seven decades. At only 7 billion barrels of oil equivalent discovered in 2017, it was the worst total since the 1940s.

2. Permian production per-rig declining

(Click to enlarge)

- The amount of oil produced per rig in the Permian basin is declining, with 10 consecutive months in a row of falling production-per-rig. On its face, that appears to…

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