Analysts at Rystad Energy said April 28 at least 300,000 barrels per day (bbl/d) of U.S. oil production will be shut in during May and June with low oil prices likely to force more production offline.
The outlook, which is up from about 100,000 bbl/d in projected cuts for April, was based on early communication from U.S. oil producers, including Continental Resources, Cimarex Energy, ConocoPhillips, PDC Energy, Parsley Energy and Enerplus Corp.
Though cuts will be spread across the Lower 48, Williston Basin is expected to be impacted the most, according to Veronika Akulinitseva, vice president of North American shale and upstream for Rystad Energy.
“The Bakken play accounts for a high share of combined output, closely followed by Permian Delaware,” Akulinitseva said in a news release. “Yet given the single-digit wellhead prices seen in the region recently, and overall commerciality, the shut-ins in Bakken are likely to be more pronounced.”
Analysts said they believe shale producers will try to deliver the cuts mainly by lowering the number of new wells put into production with base decline making up a “material portion of the reported cut.”
However, “given typical shale operational patterns, the decline in started jobs that began in March will result in a lower number of wells put on production in May, which ultimately will not lead to a drop in peak production until June,” Rystad said.
Archrock’s acquisition of Elite Compression Services also included a $30 million sale with Harvest Midstream plus the addition of Hilcorp Founder Jeffery Hildebrand to its board.
By focusing on organic growth, Summit Midstream Partners and Crestwood Equity Partners’ futures look bright.
DCP Midstream has been one of the top gas processors and NGL producers in the U.S. for more than a decade. Following the price downturn several years ago, the company has been focused on a “relaunch” dubbed DCP 2.0.