News | August 15, 2023

EIR: Density Drives Steepening Declines In U.S. Shale

Shale’s future production growth is expected to be more difficult, record-breaking, doubling production now a memory

Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS platform, has released a new report that examines how oil decline profiles have steepened across U.S. shale oil plays over the last decade.

“The U.S. shale industry has been massively successful, roughly doubling the production out of the average oil well over the last decade, but that trend has slowed in recent years,” said Dane Gregoris, report author and managing director at EIR.

“In addition, we’ve observed that declines curves, meaning the rate at which production falls over time, are getting steeper as well density increases. Summed up, the industry’s treadmill is speeding up and this will make production growth more difficult than it was in the past,” Gregoris said.

Key takeaways:

  • Even though recoveries from the average U.S. shale oil well have doubled in the past decade, production profiles for the average well have steepened more than half of a percentage point annually since 2010.
  • In the Permian, home to most U.S. oil output, the average Midland Basin oil production profile has steepened by 0.5 of a percentage point each year since 2014. The Delaware Basin has steepened by even more since that time.
  • EIR expects Permian-type curve shapes to continue to steepen over time as the basin gets more densely developed. As a result, average breakeven prices will rise.

About Enverus
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About Enverus Intelligence Research
Enverus Intelligence | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations, and macro-economic forecasts and helps make intelligent connections for energy industry participants, service companies, and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser.

Source: Enverus