News | September 26, 2023

Shale Maturity Driving Increase In Cost Of Supply


Tier 1 inventory is limited, but ample Tier 2-4 inventory should alleviate fear of North American production decline

Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS platform, has released a new report that quantifies the remaining drilling inventory across key North American shale plays.

“We see the cost of supply continuing to increase for North American shale producers over the next five years as the industry moves from developing Tier 1 to Tier 2-4 locations,” said Dane Gregoris, managing director at EIR. “However, ample Tier 2-4 inventory should alleviate fears of a structural decline in North American production or activity levels over the next 15 years.”

Key takeaways from the report:

  • EIR estimates six years of Tier 1 (sub-$45/bbl WTI breakeven) locations remaining across North America at today’s activity levels.
  • Ample Tier 2-4 inventory should alleviate fears of a structural decline in U.S. production or activity levels over the next 15 years.
  • EIR projects the North American inventory-weighted average breakeven will rise by $6/bbl WTI ($0.30/MMBtu HH) to $57/bbl WTI ($2.85/MMBtu HH) by 2028, assuming no changes to well costs.

EIR’s analysis pulls from a variety of Enverus products, including Placed Well Analytics.

Members of the media should contact Jon Haubert to schedule an interview with one of Enverus’ expert analysts.

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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