Shale pioneer Mark Papa, CEO at Centennial Resource Development Inc., said Sept. 4 that he expects U.S. oil output will grow by 700,000 barrels per day (bbl/d) in 2020, which is slower than government estimates.
The U.S. shale business is feeling the effects of lower crude oil prices, capital constraints imposed by Wall Street investors demanding fiscal discipline and well spacing issues, Papa told investors at a Barclays energy conference in New York.
“We’re seeing a lot of difficulty in growing U.S. oil production,” Papa said, noting that U.S. output has been hovering around 12.1 million bbl/d for months.
He said the best locations in the major U.S. shale basins—the Permian Basin, Bakken and Eagle Ford Shale—are being depleted and the need to move drilling to second- and third-tier locations will have a “profound” effect in six months to three years.
In separate remarks in Toronto, Dallas Federal Reserve Bank President Robert Kaplan noted that U.S. energy companies are being cautious about capital spending, with much of this year’s production growth coming from shale wells drilled previously that only needed to be hydraulically fractured.
“If that cautiousness continues, we would expect net production growth is going to be meaningfully lower next year than it is this year,” Kaplan said.
The U.S. government has estimated that the country's crude oil production will average 13.3 million bbl/d in 2020, which would be a record level.
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