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Shale Production Booms As Global Supply Wobbles

Friday May 11, 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. Shale productivity continues to improve

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- U.S. shale production continues to rise, helped along by ongoing improvements in the initial production (IP) rates of new wells.
- That allows for higher overall oil production even if the drilling rate fails to rise.
- For instance, a new well in the Bakken averages more than 600 barrels per day of production in the first month of operation, up from 400 b/d a few years ago. Similar trends have played out across all the major shale basins.
- The EIA says that IP rates have generally improved for ten years in a row.

2. Shareholders rewarding companies that pay them

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- Shareholders have pressured the oil industry to spend cautiously, hoping to put an end to years of aggressive growth-at-all-costs strategies.
- Companies that have decided to return cash to shareholders in the form of buybacks and dividends have seen their share prices soar above their competitors.
- Anadarko (NYSE: APC), for example, announced a major $2.5 billion share buyback program in September 2017, a program that was increased to $3 billion recently.…

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