GOM Partially Offsets Decline | Russell T. Rudy Energy LLC
“World Oil” reports that when oil prices started falling in late 2014, so did the onshore oil rig count in the Lower 48. From October 2014, to April of this year, the number of rigs looking for oil dropped from 1,876 to 412, a 78% decrease. Predictably, oil production is dropping as well.
In 2015 onshore Lower 48 production averaged 7.41 million barrels of oil per day (MMbopd). 2016 production is expected to average 6.46 MMbopd this year and drop to 5.76 in 2017.
Production in federal waters in the Gulf of Mexico (GOM) is expected to increase from 1.54 MMbopd in 2015, to 1.66 in 2016, and 1.82 next year. While not a total offset to onshore production decreases, this will partially compensate. Concurrently, Alaska production is expected to decrease, but only slightly.
While this is not necessarily good news, it is fairly linear and predictable. However, according to the U. S. Energy Information Administration (EIA), prices over the next couple of years will be anything but. In its April “Short Term Energy Outlook” the EIA predicts that prices between now and the end of 2017 could range from $20 to $100 per barrel. However, their most likely scenario calls for an average price of $35 this year, $41 next year, with a year end 2017 price of $45.
To read the article in its entirety, please go to http://www.worldoil.com/news/2016/4/19/expected-decrease-in-lower-48-oil-production-partially-offset-by-rising-gom-output-eia .
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